There's no question that state government is facing a real financial crisis, primarily because our legislators and governor adopted a budget that commits Georgia to spending about $2 billion more than the state will collect in tax revenues this year because of the economic slowdown.
Spending cuts will be needed to bring the budget in line with the revenues collected by the state. It is interesting that one of the first spending cuts Gov. Sonny Perdue proposed has been the $428 million in the budget that provides a property tax break of about $200 to $300 a year for Georgia's homeowners.
This isn't good news for homeowners (I happen to be one), but we have to remember that hospitals, highways, prisons, schools, and water systems don't magically appear out of thin air; it takes money to build and operate them.
To keep the budget balanced and state government in operation, Perdue wants homeowners to sacrifice their modest property tax break. That's not an unreasonable request.
The governor now should take the next logical step and start asking others to make the same sacrifices that he's demanding from homeowners.
Georgia's homeowners, you see, aren't the only group of people who have benefited from tax breaks. There is a long list of corporations, business groups and special interests that have received some very generous tax exemptions from our lawmakers in recent years.
The legislature passed a bill last year that provides sales tax exemptions for companies that buy parts to repair out-of-state aircraft. The tax break is worth nearly $12 million a year and was sponsored by coastal lawmakers to benefit Savannah-based Gulfstream. If the governor wants to eliminate the tax break for homeowners, let's eliminate this one as well.
Lawmakers have also passed bills that provide tax exemptions worth several million dollars a year for the Georgia Aquarium, which was their way of saying "thank you" to Home Depot founder Bernie Marcus for building this tourist attraction for the state. We'll all stipulate that the Georgia Aquarium is a wonderful facility that provides entertainment for a lot of people. I also salute Marcus for his generosity in building it.
But Marcus is also one of the richest people in Georgia; if homeowners are going to lose their tax break, then the Georgia Aquarium can also give up its tax break.
Just three years ago, the General Assembly passed and Perdue signed a complex bill that provides huge tax breaks totaling an estimated $100 million a year for Georgia-based corporations like Coca-Cola and Delta. It was one of the biggest tax giveaways ever to make it through the legislature and critics of the bill said it was nothing more than government welfare for CEOs.
This corporate tax gift drains a lot of money out of the state treasury that could be used to balance the budget. If the legislature is going to make homeowners give up their property tax break, then it's time to ask the same sacrifice of the executives who run our largest corporations.
Those are just a few of the examples that could be cited. The General Assembly has passed numerous tax breaks for many special interest groups over the past decade and this is one of the reasons they have a budget crisis on their hands right now. They've handed out so many tax exemptions that it's had a real impact on state revenues, and that makes it difficult to find enough money to keep the government running when an economic downturn hits.
Perdue has proposed to fix the revenue shortfall problem, at least partly, by eliminating the program that provides homeowners with a modest property tax exemption. If our elected leaders do that, then it's time to take a serious look at all the other interests that are getting tax breaks.
This is an election year, which means that each Georgian who goes to the polls will be voting to either retain or replace the House member and the senator who represents their legislative district.
I think it would quite interesting if every voter would ask their local candidate this question: Who should be giving up their tax breaks to help balance the state budget - the homeowners in your district or a multi-billion-dollar corporation?
Tom Crawford is the editor of Capitol Impact's Georgia Report, an Internet news service that covers government and politics in Georgia.