Thursday, May 3, 2012

Gov. Nathan Deal wants to make Georgia the No. 1 place in the nation to conduct business. Today, he writes that the tax reform plan he recently signed into law helps reach that goal. Meanwhile, the co-chairman of a statewide watchdog coalition applauds some measures but wants more than a cuts-only strategy.

Need for revenue was mostly ignored

By Terry Taylor

Georgia’s General Assembly may only be in session for 40 days each year, but the impact of what’s done — and not done — plays out for a very long time. Now that the 2012 session has ended, it’s fair to ask a simple question: What did our Legislature and governor do to strengthen our state’s economy, grow jobs and keep Georgia a great place to live, work and do business? Unfortunately, not enough. Not nearly enough.

2020 Georgia, a broad coalition of more than 80 statewide nonprofit organizations and community leaders, believes a balanced approach that includes revenues rather than a cuts-only strategy will help build a strong economy and create jobs. The Legislature and governor failed to create new revenue sources, undermining Georgia’s ability to fund vital services that create jobs and build a strong economy.

To be sure, there were some positives. The 2013 budget shows modest growth in revenues and spending on vital services, a welcome reversal from recent years. And the tax bill that passed at session’s end rejected the reckless tax cuts of the last few years for a more balanced approach to meeting Georgia’s fiscal needs. HB 386 also includes some promising revenue policies endorsed in the governor’s Competitiveness Initiative, such as taxing Internet sales and streamlining tax breaks to maximize effectiveness.

While portions of the new tax bill go in the right direction, it is in no way the comprehensive tax reform that Georgia needs. Instead of offering a plan to modernize the tax structure, eliminate ineffective tax breaks and produce sufficient revenue to address the state’s critical priorities, the bill continues with the piecemeal approach of the past. Another major disappointment was the failure of legislators to give lawmakers an important tool for ensuring taxpayer dollars are spent efficiently and responsibly. Legislators seldom review tax breaks to determine if they meet objectives. As a result, Georgia loses revenues for important services like schools, public safety and transportation.

A proposal — House Bill 920 — would have addressed this. But the bill never even reached the floor for a vote.

We also missed the opportunity to raise the tax on cigarettes by at least a dollar per pack. Younger smokers are especially price-sensitive. Youth smoking would likely be diminished significantly by a tax increase that added to the retail price of cigarettes.

In addition, a higher sales tax would generate much- needed state revenue for Georgia — more than $340 million annually — that could be used to fund services vital for a growing economy.

2020 Georgia believes our state deserves a comprehensive approach that includes revenues and creates the environment for jobs and growth. We can do much more to ensure a better future for ourselves and the next generation.

Terry Taylor is co-chairman of 2020 Georgia, a coalition of more than 80 statewide budget watchdog organizations.

Tax reform aids Ga. families, businesses

Georgia’s Jobs and Family Tax Reform Plan has already paid dividends. The elimination of the sales tax on energy used in manufacturing played a critical role, for example, in Georgia’s successful wooing of Caterpillar. When fully phased in, this exemption will save manufacturers $150 million per year. Even as we focus on boosting manufacturing jobs, we cut taxes for our state’s No. 1 industry by $17 million a year. This bill creates a more consistent tax code for the agriculture industry by revising sales tax exemptions and abandoning a patchwork system that penalized some agribusinesses.

I saw the benefits of the agricultural sections of the bill firsthand this week in Albany, where a company that makes crop-duster planes competes with a similar plant in Texas and with ground rigs that spray crops. Thrush Aircraft has grown rapidly in recent years, expanding employment from 65 to nearly 150 jobs. It also exports 60 percent to 75 percent of its planes, often utilizing the Port of Savannah. But the company faced ridiculous disadvantages in our Swiss cheese of a tax code.

A Georgia farmer would have to pay sales tax if he bought a plane from Thrush Aircraft, but he’d be exempt if he bought one from a Texas company or if he bought a ground rig. That’s crazy, and we fixed it. That’s one example of how we added common sense to the tax code while also helping a job creator.

Apart from making Georgia more competitive, this reform gives a helping hand to working families by decreasing the marriage penalty. By increasing the personal exemption for married couples by $2,000, this tax cut will save Georgia families about $140 million each year. The entire state benefits when we foster an atmosphere that promotes strong families. Families will see further relief at the cash register. We’ve brought back the sales tax holidays for back-to-school shopping and for energy-efficient appliances.

One of the most significant changes will make for happier birthdays for all Georgians who own cars. House Bill 386 eliminates the hated “birthday tax” on vehicles. Starting next year, car owners only have to pay a one-time, upfront fee.

The special council on tax reform and the Competitiveness Initiative team traveled the state and gave all Georgians a chance to express their ideas, their perspectives and their concerns.

At the end, this open, transparent process delivered a significant reform that provides tax relief to individuals, families and job creators, promotes fairness and equal treatment under the law, and advances our state’s economic competitiveness.

This is a great step toward making Georgia the No. 1 place in the nation to do business.

Nathan Deal is governor of Georgia.

Click here to view the original guest column.

Click here to download a PDF version of 2020 Georgia & Governor Deal’s Guest Column in the AJC.

Tax reform bill draws praise from business

By BLAKE AUED

Published Saturday, March 31, 2012

Athens Banner-Herald

Cal Clements reads through a book inside Avid Bookshop in Athens, Ga., Thursday March 29, 2012.

(AJ Reynolds/Staff andrew.reynolds@onlineathens.com)

A sweeping tax reform bill that barreled through the state legislature last month will put Georgia businesses on an equal footing with those in other states, politicians and business leaders say.

The bill, which Gov. Nathan Deal has indicated he will sign, will change Georgia’s economy in a number of ways. Car buyers will pay a one-time fee rather than taxes, more online retailers will have to collect sales taxes, manufacturers will no longer have to pay taxes on the energy they buy, and shoppers will get a break on sales taxes Aug. 10 and 11.

Georgia is the only southeastern state that charges a sales tax on energy. The tax cost local transformer and solar panel manufacturer Power Partners $150,000 last year. Competitors in other states that don’t pay such a tax have a “definite advantage,” Power Partners human resources director Dan Carton said.

“That is money we’ll be able to put back into the business now,” Carton said.

Avid Bookshop owner Janet Geddis said Amazon.com has a competitive advantage over her local, independent store because customers don’t have to pay sales taxes when they buy from Amazon, but she’s not sure the bill will help.

“It really remains to be seen how it plays out,” she said. “Since Amazon didn’t raise a fuss, I’m not sure they will be taxed.”

Geddis’ suspicions are correct — more online products will be taxed, but sites like Amazon that don’t have a physical presence in the state still won’t have to collect taxes. Federal law only requires online retailers with stores or warehouses in a state to charge sales taxes on purchases in that state.

“For me, it’s a fairness issue, and it’s an economic development issue,” Geddis said. “If they had to pay tax that could help our schools and our roads, imagine what a difference it would make.”

Another part of the bill would replace sales and property taxes on cars with a 7 percent title fee paid when a car buyer registers the vehicle. By requiring casual used-car buyers and people who move to Georgia, in addition to those who buy cars at dealerships, to pay the fee, the state will bring in an estimated $503 million over three years. “It is sort of beneficial for dealers because everyone who buys a car will have to pay taxes or a title fee,” said Buddy Allen, owner of Heyward Allen Toyota.

The bill also revives a sales tax holiday for back-to-school shoppers that lawmakers canceled in 2010, after the recession took a chunk out of tax revenue. The holiday is often a boon for retailers that sell clothes and electronics.

Other provisions include a $2,000 tax deduction increase for married couples and tax breaks on manufacturing equipment, farm equipment and airlines’ jet fuel.

Overall, state lawmakers and business leaders say the tax reform plan will make Georgia more business friendly. It will “bring about much-needed jobs and investment to our state,” Georgia Chamber of Commerce President Chris Clark said.

“Its passage will allow Georgia to have an even stronger presence in the global marketplace as we increase our competitiveness by both supporting existing business and attracting new investment,” Clark said.

The bill passed the House unanimously on March 20 and the Senate four days later. And one progressive group, 2020 Georgia, cautiously praised it.

The Georgia Budget and Policy Institute, a left-leaning think tank, called it a hodgepodge of reheated ideas, though. It’s a mix of good ideas, like taxing Internet sales, and bad ones, like reviving the sales tax holiday, GBPI Executive Director Alan Essig said.

“It must be viewed as merely a small step forward for tax reform in Georgia, rather than the end of the process,” Essig said. “To provide Georgians with a modern tax system capable of funding the state’s ever-growing needs, lawmakers must address the issue. The work is not done and requires the leadership and political will to pass comprehensive reform.”

Read the original story here.

Download a PDF version here.

Below is a highlight of the various components of HB 386:

1. Retirement – Caps the exemption for retirement income (e.g. pensions, investments) at $65K for individuals and $130K for couples. In addition to bringing in an estimated $92 million in state revenue over the next three years, the change could potentially raise more than $100 million per year beginning in Fiscal Year (FY) 2016.
2. “Marriage penalty” – Provides a tax cut to married couples in Georgia by increasing the personal exemption by $2,000 for joint filers and by $1,000 for married filing separately. Will cost an estimated $362 million over three years.
3. “Birthday Tax” – Enacts a complex reform to how Georgia taxes automobiles. Replaces two existing taxes (sales tax + local ad valorem) with a new 7 percent title fee charged whenever a car changes ownership.
4. E-Fairness – Takes a first step toward taxing online purchases through the sales tax. Due to the constraints of federal law, this will capture only about 5 percent of the revenue Georgia is estimated to lose from e-commerce.
5. Exemption on energy used in manufacturing– Over a four-year phase-in, will eliminate the sales tax levied on the energy used in manufacturing. The reform will cost the state $178 million over three years. Local governments will retain some ability to keep the tax.
6. Changes to existing exemptions – Revises existing tax exemptions or credits for film production, conservation, and agriculture. Revisions are roughly revenue neutral.

Concerns

We are concerned about the $86 million deficit in the first two of years of implementation. To pay for the shortfall, we cannot afford further cuts and instead need new revenues in education, vital services, healthcare, and other areas that improve Georgia’s quality of life.

Missed Opportunities

• Increasing the cigarette tax by $1 per pack. This would generate $340 million in revenue to invest in Georgia’s future and reduce smoking among kids.
• Require, where feasible, a cost-benefit analysis of each tax break that Georgia provides.  Such analysis would help identify narrow and ineffective tax breaks for elimination, while keeping broad based exemptions such as the grocery exemption.

Download the PDF version of this fact sheet here.

For a more detailed look into HB 386, click here to read GBPI’s bill analysis.

Monday, March 19, 2012

Prime Time Lawmakers interviewed, Patricia Nobbie, Deputy Director with Georgia Council on Developmental Disabilities & Unlock the Waiting List! on 2020 Georgia’s response to the Governor’s tax package. Watch the interview here, 2020 Georgia’s segment begins at the 5 minute 45 second mark of the program.

2020 Georgia                               13^th Generation Strategies

info@2020georgia.com                  kimberly.krautter@13thgen.com

404-514-8445                                404-229-1073

Official Statement

Governor Deal’s Tax Plan Offers Balance but Tables Key Revenue Solutions and Critical Investments

ATLANTA, GA (March 19, 2012) — 2020 Georgia, a non-partisan, broad-based alliance of statewide organizations that advocates for a balanced approach meeting the state’s budget demands including revenue solutions, has released the following statement on Governor Deal’s tax plan.

STATEMENT:

The partners of 2020 Georgia are pleased that the work being done by the coalition is having a positive effect on the state budget process. The new plan appears to present a more balanced approach to the budget than previously proposed.

While Governor Deal’s plan provides new sources for state revenue, most notably a sales tax for Internet purchases, it ignores the opportunity to raise an additional $350 million in annual revenues by leaving the cigarette tax on the table. These additional revenues could fund critical investments in infrastructure, workforce readiness and education that affect Georgia’s ability to create jobs and grow the economy.

2020 Georgia believes that without new funds for critical investments, Governor Deal’s plan may not be enough to improve Georgia’s quality of life. Georgia is already ranked as the fourth most favorable state for doing business. We are also concerned about the $50 million deficit represented by House Bill 386 (HB-386), which encompasses this plan. We cannot afford further cuts in education, vital services, healthcare, and other areas that improve Georgia’s quality of life to pay for the deficit this creates.

As Georgia implements the new business tax breaks and revenue streams included in this plan, the state needs to be able to measure and ensure Georgia taxpayers understand the return on investment they are receiving as a result of corporate incentives, credits and cuts.  While this plan demonstrates Governor Deal’s efforts to bring fiscal responsibility and accountability to government, 2020 Georgia hopes that he will champion new proposals that would enable the state to analyze these tax breaks and weigh their costs and benefits.

###

ABOUT 2020 GEORGIA: 2020 Georgia is a broad alliance of community leaders and organizations. Our common goal is to promote a balanced approach and revenue solutions that meet the short and long term needs of our state and its people. For more information, visit our website at www.2020georgia.org.

Who: Bump It Up A Buck Coalition

What: “Kick Butts Day” Rally at the State Capitol

When: Wednesday, March 21, 2012 at 10:00 a.m.

Where: Washington  Street  Side

Why: Join us to speak out about the dangers of cigarettes and say no to Big Tobacco marketing its products to Georgia’s kids and young adults.

We will come together in a unified voice to show our support for an increase of the cigarette tax by $1 per pack. This would not only improve the health of all Georgians, but it could raise more than $340 million in new tax revenue each year!

2020 Georgia is a proud supporter and partner of the Bump It Up A Buck coalition and we will be speaking at the event!

To read more details about the rally, click here to see the “Kick Butts Day” flyer.

Atlanta Business Chronicle by George M. Israel III, Special to Atlanta Business Chronicle

Date: Wednesday, February 22, 2012

George Israel is the former CEO of the Georgia Chamber of Commerce and former mayor of Macon. He has written an opinion piece in opposition to Georgia House Bill 868, which is currently in the House Ways and Means Committee and will likely go to the floor for a vote this week.

HB 868 was drafted in response to Gov. Nathan Deal’s “Competitiveness Initiative” and proposes lowering the threshold for business to qualify for tax credits. Israel’s piece follows:

For decades Georgia lawmakers have partnered with the business community to make our state a favorable destination to do business. During my tenure as CEO and president of the Georgia Chamber of Commerce, I actively advocated for various tax credits among other business concerns, and as of 2011 Georgia ranked as one of the top five most business-friendly states in the nation. Having achieved this distinction already, further pursuit of narrow tax breaks is unlikely to improve Georgia’s competitiveness.

To the contrary, credits like those proposed in House Bill 868 could inadvertently undermine our state’s economy by diverting revenue from equally essential investments. Businesses that create quality jobs in Georgia already enjoy a generous tax credit that carries forward for ten years after the jobs are created. House Bill 868 seeks to lower the threshold for achieving that benefit and, in some cases increase the amount of the credit received. That means companies will have to create fewer jobs to earn even larger benefits. In this difficult economic climate lawmakers may be tempted to approve any proposal claiming to be pro-jobs and pro-business, but companies have larger concerns than taxes.

To thrive, businesses large and small need a well-educated workforce, good transportation systems to facilitate their supply-chain, and stable, safe neighborhoods for employees and customers. They also need customers with sufficient income to buy their goods and services, something that tax credits cannot assist. If business is bad and people aren’t buying, companies won’t hire regardless—no matter the tax benefit. For this reason, I agree with the 2020 Georgia coalition’s position that lawmakers need to take a more balanced approach and seek new revenue sources rather than seeking politically expedient credits that are unlikely to measurably-improve our state’s economy.

The sponsor of HB 868 estimates that the proposed tax credits will cost around $68 million each year. Absent new revenue such as from additional taxes, that loss will have to be made up through cuts to other essential services. Lawmakers need to ask if Georgia can afford the meager benefits of this bill at a time when more teachers are being cut and class sizes are increasing; when technical colleges are being forced to consolidate and college tuition and fees are limiting access to higher education.

As the current president of the Ferst Foundation for Childhood Literacy, I have a front row view on how Georgia’s failure to adequately fund education makes our state less competitive. Right now, hundreds of jobs remain unfilled because our state does not have a qualified workforce. One in four Georgia adults functions at a low literacy level, costing businesses in our state $7 billion annually.

Legislators should also consider putting the brakes on any further tax credits until the state can measure whether the current ones are working. If Georgia is planning to expand and strengthen tax breaks for businesses, then taxpayers need to know if the ones we have already are attracting new businesses, creating new jobs or enhancing the state’s economy.

Good afternoon, members of the Budget & Fiscal Affairs Oversight committee.

My name is Pamela Perkins Carn, and I am co-chair of 2020 Georgia, a broad coalition of more than 80 statewide non-profit organizations and community leaders. We represent Georgians from every part of the state and all walks of life in the issues that we are discussing today.

2020 Georgia believes that a balanced approach that includes revenues, rather than a cuts-only strategy will help build a strong economy and create jobs.

We are here today to thank you for your leadership and show our coalition’s support for HB 920.  We need to make sure the tax breaks we give out produce the results they were intended to create.  This is a positive first step in making sure we account for every taxpayer dollar on the revenue side and protect every dollar we invest on the budget side. HB 920 provides a tool for Georgia to weigh the costs and benefits of our tax expenditures and puts us in a better position to create jobs, strengthen our economy, and improve our quality of life.

Again, know that we are very supportive of your leadership in HB 920 and look forward to helping you make informed decisions for the future of Georgia.

Click here to view a PDF version of our testimony to the Budget Affairs & Fiscal Oversight Committee regarding House Bill 920.

– Valdosta, Ga. — February 9, 2012 –

By: Eames Yates

Statewide budget cuts could terminate 20 teacher and educational staff positions within the Department of Juvenile Justice’s educational program. Of those 20 jobs, 8 are currently vacant. 4 of these jobs are for actual teachers.

There is no word yet as to where the cuts will occur. Juvenile Court Judge Wayne Ellerbee says the Juvenile Justice Department “has not been the favorite of the legislator. They don’t like to spend money on juveniles or on children for things perhaps parents should be doing.”

He elaborated on the impact of the budget cuts emphasizing the importance of rehabilitation. He said “education for a lot of these children is the last asylum or the only asylum they have for structure. The only asylum they have for at least two meals a day. The only place they have where perhaps they feel like somebody cares for them.”

Last year in Georgia there were over 1,100 juveniles sentenced as adults. The state pays over $1.1 billion for prisons annually.

To read the original story, click here.

To see the full fact sheet affiliated with this story, Choice 2, click here.

Feb. 7, 2012

ATLANTA — Having an impact in the General Assembly isn’t easy when the force of your argument is all you have going for you, as minority parties have always known.

The civics-class explanation of how a bill becomes a law suggests that reasoned debate wins the day. On the other hand, skeptics charge that moneyed lobbyists pull all the strings.

In most instances, though, the fate of most bills rests in the hands of the majority party. Since they constitute a majority, they win every vote as long as their members stick together.

That leaves the minority party casting about, with neither the resource of votes or money. So, they put their faith in the civics-class model and hope they can marshal enough facts and logic to be convincing enough to overcome partisan ties. Usually, they can’t, having no more success than Republicans did when the tables were turned.

That leaves only the long-term goal of convincing the public in hopes of a different outcome on Election Day.

To do that, Democrats are now holding a series of what they bill as hearings.

The point is to show there are other possible solutions besides those offered by the majority Republicans.

Some hearings have drawn more attention than others. Recent hearings on capping income qualifications on the HOPE Scholarship drew statewide press coverage. There was less so at the next one on relaxing the grade-point-average for the HOPE Grant in technical colleges.

A hearing on Thursday about economic proposals drew just three journalists, two from Georgia Public Broadcasting.

“We’re discussing issues we think are important to Georgia families,” said Rep. Winfred Dukes, D-Albany. “Creating good jobs is a primary obligation of our state.”

On display then were bills said to be helpful to economic development. One would require state agencies to give preference to American-made products when taking bids and another a similar preference toward companies that hire Georgians when shopping for services.

“By starting with the basics of determining how government must help where it can and get out of the way when it should, I have introduced this bill to provide better economic security for Georgia employees,” said Rep. Quincy Murphy, D-Augusta, sponsor of the services bill. “This legislation will not cost the state a single dollar, but it will be transparent to citizens who want to see their tax funds spent well and spent on improving our employment rates.”

Georgia already applies a preference on the purchase of compost and mulch — evidence of someone’s focused influence. When it comes to other products and services, Georgia gives in-state vendors the same preferences that the home states of other vendors give their local businesses. That means a Georgia company bidding against an Alabama company would get the same preferences as the Alabama company would enjoy when it submits proposals at home.

Some of the Democrats’ proposals are relatively modest, such as the Rural Tourism Protection Act. It requires the Department of Natural Resources to ask local governments if they’d like to take over operation of a state park or historic site slated for closure due to budget pressure. The department already does this and has turned over Tanner State Park to Carroll County and several golf courses to local governments.

Still, the hearing was a chance to make a public stand, as Rep. Bob Bryant, D-Garden City, did before the three-dozen attending Thursday’s hearing.

“For the past eight years, I’ve worked in this state for economic development,” he said. “As a representative from Savannah, I understand the importance of tourism. Without the Rural Tourism Act, we have the potential to lose millions of dollars in tourism.”

For good measure, the Democrats included Rep. Pat Gardner’s bill to create an online clearinghouse for information about health insurance plans available to small businesses. Such sites, known as health exchanges, are a requirement of federal health reform, and she argues they’ll still be beneficial even if the U.S. Supreme Court eventually strikes down the federal reform act.

What makes the health insurance site an economic-development issue, she said, is the cost to employers.

“Small businesses across Georgia are facing skyrocketing health care costs,” said Gardner, D-Atlanta. “Georgia needs and deserves a bill that will provide both relief and options for employers to choose manageable contributions levels for employee coverage.”

Democrats aren’t alone in staging hearings to demonstrate concern for small businesses. House Republicans held their own Red Tape Watch the same afternoon. The House Small Business & Job Creation Committee invited small-business owners to testify about the government regulations they don’t like.

Hearings also become a forum for special-interest groups to publicize their own agendas. For instance, at the Democrats’ gathering, the first public speaker was Terry Taylor, co-chairman of the 2020 Georgia coalition that advocates higher taxes to provide more funds for social services. Some observers might argue his stance directly conflicts with the view that small businesses would hire more people if they paid less to the government.

But the hearings are not designed for debating but rather for show. Generally, everyone speaking in each is already in agreement anyway.

Read the original story: RN-T.com – Analysis Democrats try to make a mark as a minority.

Click here to download a PDF version of Rome News Tribune – Analysis Democrats try to make a mark as a minority.