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The Times Interview: Deal hopes tax fix can spark Ga. economy
Governor plans to unveil job growth plan in Tuesdays addresses
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Gov. Nathan Deal responds Wednesday to a question posed by Times political reporter Ashley Fielding during an interview inside the Georgia State Capitol Building. - photo by SARA GUEVARA

The Times Interview

Over the next three days, The Times will discuss the 2012 General Assembly session with the state's top three leaders: today, Gov. Nathan Deal; Friday, Lt. Gov. Casey Cagle; and Saturday, House Speaker David Ralston.

Coming Sunday: Your Gold Dome Guide preview to the legislative session.

INTERVIEW VIDEO HOMEPAGE: Times reporters go one-on-one with Northeast Georgia's top newsmakers

"How do we stimulate job growth in the state of Georgia?" Georgia Gov. Nathan Deal has asked.

He now believes he has the answer.

Following recommendations from a number of state business leaders, officials and local government lobbyists, Deal is preparing to reveal a list of proposals he believes will help revive Georgia's economic spirit after years of backsliding.

Deal and his handlers are keeping the details of the plan tightly sealed until Tuesday morning's Eggs and Issues breakfast and the State of the State address that night at the Capitol.

He is making his State of the State remarks at 7 p.m. in prime time this year. His staff Wednesday promised announcements on education, transportation, health care and criminal justice.

His remarks at Eggs and Issues will unveil a proposal for tax reform.

In an interview Wednesday with The Times, the governor said the proposal includes a suggestion to repeal a tax manufacturers must pay on their energy use. Already, members of the state's Public Service Commission, which regulates utilities in Georgia, have called for the repeal of the tax, claiming Georgia lost more than $1 billion in investment in new and expanded manufacturing plants because of high energy costs.

The sales tax is levied based on energy used in the manufacturing process. The state portion of the tax is 4 percent, though local governments can levy their own percentages.

State auditors have said the tax generates around $137 million in annual state revenue, according to previous news reports.

"Obviously, you want to try to keep things as revenue-neutral as possible, and we're going to have some suggestions as to areas that we can do that in," Deal said.

The 2012 General Assembly session begins Monday. While Deal is still keeping details of his legislative agenda under wraps, he said Wednesday there are areas in Georgia's budget "where (legislators) can make small adjustments" that will make up for the revenue loss.

He did not rule out shifting the tax burden to another sector, or making more cuts.

"We do believe, though, that anything that stimulates growth, by its very nature, will replace any lost revenue that you've (eliminated) to stimulate that growth, because it is a dynamic process," Deal said. "If, by removing one tax, we create more manufacturing in our state, that means more jobs, that means more people that are paying income tax, that means more people that are buying goods and paying sales tax. So it does serve its own purposes."

But job creation, the governor said, is the "underlying goal that we have here." If the state creates an environment more friendly to manufacturers, he believes the state might move closer to that goal.

An energy cost index, a ranking of states by gas prices, electricity and energy costs compiled by the Small Business & Entrepreneurship Council, ranks Georgia below other Southern states when it comes to keeping energy costs low.

The council's 2011 report had Georgia ranked with Illinois at No. 32 nationwide, and only ahead of Florida in Southern states' energy costs.

Deal thinks eliminating the energy sales tax might improve Georgia's ranking in the region.

"Most of our neighboring states do not have that tax in place, so it's sort of a bit of catchup in that regard," said Deal.

 

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