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Crawford: Is new Ga. tax plan a good deal?

POSTED: March 28, 2012 12:30 a.m.

How long does it take for the legislature to adopt a tax revision plan? As we saw last week, it does not take long at all.

The tax measure known as HB 386 was released to the public Monday morning at a joint committee meeting where lawmakers spent a few minutes giving a quick overview of the bill’s provisions.

When House Minority Leader Stacey Abrams asked to see the fiscal models that were used to determine the impact of the tax changes, Rep. Mickey Channell, R-Greensboro, curtly responded, “We don’t have that available right now.”

The joint committee met again Tuesday morning for less than 10 minutes to vote the bill out. When Senate Minority Leader Steve Henson asked why this bill had suddenly appeared so late in the session, House Majority Leader Larry O’Neal enlightened him.

“We’re late in the session,” O’Neal explained, “because it has taken this much time.”

It’s certainly hard to argue with that kind of logic.

The House passed the bill that same afternoon, then rushed it over to the Senate, where it was unanimously adopted on Thursday and sent to Gov. Nathan Deal’s desk.

Boom-boom-boom, it was done and over that quickly.

Will the tax bill be a good thing for the state and its citizens? Nobody really knows.

The leadership wanted to get the bill out the door before anyone had a chance to read it very closely. Lawmakers wanted to pass something they could call “tax reform” when they are running for re-election this year, and that’s what they did.

“This package is good news,” Deal said after the Senate vote. “It means our state is more competitive and is a state where we can grow jobs.”

Actually, numbers released by the state Labor Department on the morning of the Senate vote refuted those job growth assumptions.

Labor Commissioner Mark Butler disclosed that Georgia’s unemployment rate dropped to 9.1 percent in February, the lowest rate in three years. “We created 15,600 jobs, lots of unemployed Georgians went back to work, and fewer people were laid off,” Butler said.

Georgia’s economy has turned around and jobs have been growing for the past few months, in the absence of any new tax breaks passed by the legislature.

HB 386 was supposed to be a comprehensive overhaul of the state’s antiquated tax code, but it became an odd collection of tax breaks and tax increases. It’s like walking through an auto parts warehouse and picking out pieces of equipment at random from the shelves, assuming that you will somehow be able to assemble these parts into a smoothly running automobile.

We don’t have a Maserati here. We have a messy pile of nuts and bolts.

The piece of the plan for which businesses lobbied the hardest was the elimination of the sales tax on energy used in manufacturing and mining.

Deal and the legislative leadership insisted that Georgia needed to get rid of the energy tax to compete with its sister states in the region. Of course, the sales tax on energy was in full force throughout the 1990s, when Georgia was outpacing every other Southeastern state during that economic boom period.

There are some tax changes that Georgians will undoubtedly enjoy.

The yearly property tax due when auto license tags are renewed will eventually be replaced by a one-time title fee of 7 percent paid at the time of the vehicle purchase. Anyone who buys a car will surely approve of that.

The tax change that could have the largest long-term impact is the requirement for retailers like Amazon to collect sales taxes on merchandise they sell over the Internet.

People who buy stuff online are going to be paying higher taxes because this is definitely a tax increase. Given the growing trend toward Internet shopping, this could eventually become one of Georgia’s biggest sources of tax revenue. This was also a part of the tax bill that irked the tea party factions.

“We got this bill yesterday afternoon,” conservative activist Kay Godwin complained before the House passed it on Tuesday. “We had less than 24 hours to look at it before it will be voted upon.”

Godwin wasn’t the only one who didn’t have time to review this complex piece of legislation. There were a lot of legislators who were in the same boat with her.

Tom Crawford is editor of The Georgia Report at gareport.com. His column appears Wednesdays and at gainesvilletimes.com/viewpoint.

 

 


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