In a little less than a week, Georgia legislators will convene a new session for 2015, and Gov. Nathan Deal will follow shortly after by taking the oath of office for his second term. The governor and the leadership of the General Assembly have some tricky challenges to deal with this year, with no guarantees that they will be able to handle them successfully.

For Deal, his big problem will be how he copes with the potential failures of rural hospitals all over the state. Four rural hospitals have closed their doors over the past two years because they ran out of money. During the legislative Biennial Institute in Athens last month, health care experts predicted that 15–19 more rural hospitals were in danger of shutting down.

That prediction could be conservative. Scott Kroell, the CEO and administrator of Liberty Regional Medical Center in Hinesville, said the number of future closings could be even higher. “I think there is a potential for 30 hospitals to close, and not just small ones,” Kroell said in a recent interview. “But small ones are the most endangered.”

Officials of some of the state’s major hospital groups have urged the political leadership to approve the expansion of Medicaid coverage under the Affordable Care Act, which would be a way to bring in more financial assistance for struggling hospitals. Georgia could receive more than $3 billion a year in federal payments for agreeing to expand Medicaid coverage under that arrangement, with much of the money going directly to financially distressed rural hospitals. 

Deal has consistently said no to that idea, however, and he also has surrendered his power to work out such an arrangement. He signed a bill passed by Republican lawmakers last year that transfers the authority for expanding Medicaid from the governor’s office to the legislature. Even if Deal changed his public stance and tried to get federal approval of a Medicaid expansion program that would mean more money for rural hospitals, the General Assembly’s majority would surely block that attempt.

For the legislative leadership, their challenge will be coming to grips with the realization that taxes must be raised if the state is going to do anything about its highways and bridges. A report issued last week by a legislative study committee confirmed that Georgia needs about $1.5 billion extra each year to do the needed maintenance work on its highways.  

“Georgia’s existing transportation networks will deteriorate, the needs identified in the SSTP [state plan] will go unmet, and Georgia’s longstanding position as a leader in transportation infrastructure and economic growth will erode" unless more revenues are raised, the report said.

The report’s language indicates that the legislature convert the state’s complicated motor fuel tax to a simpler excise tax that could be indexed to increase with inflation, and impose an additional one-cent sales tax that would raise about $1.4 billion a year for road and transit projects.

Georgia remains the eighth most populous state, but ranks 49th in the money it spends on transportation needs. There is a general agreement among Republicans and Democrats alike that more needs to be spent if we are to keep up with states of similar size.

That amount of money can only be raised through taxation. A majority party that has spent years avowing that all tax increases are bad will have to figure out how to change directions on this without angering its supporters. That is going to be a tough road to pave.