Tax cuts are like ice cream; we might all like different flavors, but it's all good. Which is why every politician with a hand to shake would love to promise free ice cream to everyone.
So for a politician to come out against any plan to cut taxes is akin to being anti-ice cream, and tantamount to election-year suicide. That apparently is what state House Speaker Glenn Richardson is counting on.
Richardson has floated a plan he will introduce in next year's legislature that would eliminate all city and county property taxes in Georgia. That $8 billion in revenue would be replaced by a higher state sales tax on goods and services. The state then would allocate those funds to city and county governments for their spending needs.
If the plan is proposed next January, as the speaker promises, it would need to pass the House and Senate by two-thirds vote before it could appear on next year's state ballot as a constitutional amendment.
"Property taxes are rising beyond the ability of people to pay them," Richardson said.
Sound good? Well, all tax cuts do until you look at the fine print. Keep in mind that most times when taxes are cut from one source, governments merely dip into a different pocket to replace that revenue. This is not a tax cut but a tax shift, with the difference being who has power over the money.
A study by Georgia State University's Fiscal Research Center indicates that such a plan would give the state a $2 billion budget shortfall, and that's if sales taxes were levied on nearly every product and service (Richardson discounts the study).
Richardson calls his plan GREAT, as in Georgia's Repeal of Every Ad Valorem Tax. His critics might label it Local Officials Undermined by State's Yield, or LOUSY.
The speaker claims that the plan would even out the tax burden statewide. But many Georgians, such as retirees who are exempt from property taxes, would pay more in the long run. So would everyone who deducts property taxes from their federal income taxes.
So far, Richardson's fellow Republican legislators have offered lukewarm support. That's probably because no one facing an election wants to come out publicly against a tax-cutting plan, nor spark the speaker's ire and risk losing influence in the party.
Local government officials, however, are livid. They don't want to see their ability to levy taxes for local needs superseded by state fiat. And they don't want to have to go crawling to the capitol, hat in hand, every time they need to build a park or renovate a building.
Richardson says he isn't trying to wrest control from city and county officials. In a speech last week before county commissioners in Atlanta, he asked them to work with him on the plan rather than reject it out of hand. "I am not here to criticize you. I am not here to take away your power, your control," he said.
They're not convinced. Members of the Georgia Municipal Association, in a visit with The Times editorial board last week, shared concerns that local control over spending on key services would be handed over to state officials far removed from the cities and counties they serve.
"GMA is not opposed to tax reform," says Jim Higdon, GMA executive director. "We are opposed to a state takeover of local decisions."
Wasn't local control of government once a keystone in GOP ideology? Republicans often push for state sovereignty to trump federal mandates. In this model, just substitute the cities and counties for the state and Atlanta for Washington, D.C.
Local governments, by their nature, have to be responsive to the people they serve. The city and county services we fund are vital to our lives: Police and fire departments, emergency personnel, schools, prisons, sewer and water, roads and traffic, just to name a few. That's not to mention quality-of-life services such as libraries, parks and recreational facilities.
We all want to get a dollar's worth of government for each tax dollar we pay. Few would argue that we do in Washington, where tax money is wasted on pork projects thousands of miles from us. But the taxes we pay in Gainesville, Hall County, Flowery Branch, Braselton, Buford, Lula and elsewhere provide services we need and use every day. If any level of government is giving us our money's worth, it's the local level.
To be fair, many homeowners indeed are upset that their property taxes keep going up to pay for services they don't receive. That's been the case in metro Atlanta counties like Fulton and DeKalb, and helped spark the "secessionist" movement to form new cities. It's a valid concern, but one that should be solved locally. Richardson's plan would try to cure a sick patient by throwing him off a cliff.
When local officials aren't good stewards of our money, we can simply vote them out of office. But we only send a few legislators to Atlanta, not enough for a majority. If the state controls all spending, we'll be dependent on legislators from Savannah, Macon, Columbus and Hiram -- especially Hiram -- to decide our fate.
Local governments now can set priorities and adjust tax levies as needed. Say the city wants to build an office park to bring in new business and add to the tax digest. Under the GREAT plan, it would have to lobby the legislature for the money and wait for a thumbs-up or thumbs-down. Every pothole to fill, every park bench to paint, every new softball diamond to construct would have to pass by the speaker's golden throne.
It's hard to imagine how the legislature would handle such myriad and miniscule spending bills in a 40-day session. It already has trouble passing a state budget before the gavel drops. Add thousands of local projects to be vetted and we would need a costly, full-year legislative session.
So what's the driving force behind this plan? Some suggest it's the speaker's ambition to run for governor in 2010. Even if his plan fails, he can claim he was the guy who wanted to cut property taxes and all those evil big spenders wouldn't let him.
Any change in how we raise tax revenue needs careful consideration before we blunder into a plan that will drain the state treasury and shut down key services. Richardson's proposal appears iffy at best, and needs a healthy debate from both sides before it gets rammed through for political reasons. We hope legislators will treat it with the proper degree of skepticism.
After all, if you gobble down too much ice cream, your pants won't fit anymore.
Originally published Oct. 14, 2007