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Cagle continues push for tax cuts
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In a tough budget year when lawmakers are hard-pressed to find fat to trim from the state’s finances, Lt. Gov. Casey Cagle said he’ll continue to push for tax cuts.

“We need to make sure we do the responsible thing, create efficiencies and bring government back to the 21st century and focus very deeply on cutting taxes,” Cagle said Tuesday at the Georgia Chamber of Commerce’s annual Eggs and Issues Breakfast.

Cagle said he opposes raising taxes to fill the state’s budget hole, and said he favors “right-sizing government” instead.

“We have got to have foundational changes,” he said.

State revenues have continued to decline and lawmakers have already slashed $3 billion from the budget. With revenue predicted to fall short by about $1.5 billion this fiscal year, state leaders are tasked this session with finding more cuts.

Cagle also pledged to boost the state’s economy, and Senate leaders have announced a budget task force that is expected to present its business-minded solutions to fix Georgia’s finances next month.

Sen. Lee Hawkins, R-Gainesville, said Cagle’s plan was to create tax incentives for businesses who, in turn, create new jobs.

Hawkins said the plan would include reducing some government services to only the ones lawmakers deem essential.

“Right now, we need to really focus on providing jobs,” Hawkins said. “That’s the key to the recovery of this economy ... to provide jobs and get people out of unemployment.”

One avenue lawmakers may explore to incentivize job creation, according to Hawkins, would be to credit the state employee tax employers pay on new workers back to the businesses.

“If you credit that to the business, then, although the state would not pick up the new employee tax, the business would get credit for it. And if we did that for a specified amount of time, it would create jobs and really not cost the state any revenue...” Hawkins said. “Obviously, that would affect new revenue, but I think what we need to focus on right now is getting people back to work.

People need jobs; they need to be able to take care of their families, and that’s the focus we need to make.”

Though Cagle’s comments have not been discussed in the state House, Rep. Carl Rogers said he thinks general tax cuts are out of the question this year. However, he did say there may be some incentives like Hawkins mentioned to create jobs.

“At this point, no, I don’t think we can afford to cut any more, other than job credits, job enhancements, things of that nature,” Rogers said.

Last year, Gov. Sonny Perdue vetoed a sweeping tax cut bill, arguing that the state couldn’t afford it. And the state budget is expected to be in even more dire shape this year.

In May, Perdue struck down a proposal that would have cut the state’s capital gains tax in half over two years and given tax breaks to those who hire the unemployed. He called the idea “unattainable” in the down economy.

Supporters of the measure said it was the state’s version of a stimulus package that would put Georgians back to work and help stem Georgia’s high unemployment rate. Critics said the capital gains cuts would only do more damage to the state’s budget and help only the richest Georgians.

Georgia Budget and Policy Institute Executive Director Alan Essig said cutting taxes is unrealistic in the current economic climate.

“It’s going to be hard enough under the current tax code to balance the budget without absolutely devastating budget cuts,” Essig said. “Adding to the deficit is just not responsible. I can’t understand the discussions of additional tax cuts at a time when we’re cutting teacher salaries, when we’re furloughing employees, when services are being cut across the board.”

Cagle had been considered a front-runner for the Republican nomination for governor, but he took himself out of the race last spring for health reasons.

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