What shortfall? Ga. legislators push tax breaks
Eds: ADDs comments from governor, minor edits.
By GREG BLUESTEIN
Associated Press Writer
ATLANTA (AP) — Georgia lawmakers have spent the first weeks of the legislative session mostly wrangling over how to hack $2.2 billion from its spending plan, but they are still finding room for special tax breaks.
The House on a 132-31 vote approved a plan Tuesday to extend tax breaks to save Delta Air Lines Inc. and other air carriers roughly $25 million in state taxes on jet fuel each year. It is one of about a dozen other measures this year seeking tax breaks for everything from aircraft parts to zoo expansions.
Supporters, including many Republican power brokers, say tax breaks are a proven way to attract new business and spur economic growth.
“It’s an important public policy statement we make,” House Speaker Pro Tem Mark Burkhalter, an Alpharetta Republican, said as he pushed the jet fuel tax cut.
Critics contend that doling out such breaks — an estimated $250 million worth this year — is a poor idea because Georgia is facing a widening budget crunch.
“I understand that we have industries in our state that need some help, but we also have Georgians that need some help,” said state Rep. David Lucas, D-Macon, who said he’s outraged lawmakers are considering tax cuts while state departments are being forced to furlough employees.
“I’m telling you, part of our problem has been us,” he said. “We’ve got the partisan politics, with talk about who is going to out-tax-break the other party.”
He joins a growing chorus of legislators and budget analysts who say the economic crisis should warrant freezing new tax breaks or, at the very least, force a review of each one.
“In light of a fiscal crisis we should put a moratorium on extending existing tax breaks or putting in new ones,” said Alan Essig of the Georgia Budget and Policy Institute, a nonpartisan watchdog. “And if we don’t do that, we should at least think about reducing the amount of a tax break.”
Some of the proposals would dole out breaks to families by renewing a popular back-to-school sales tax holiday. Others seek to encourage more conservation by offering special breaks for energy efficient and water efficient devices. Another tier aims to spur job growth by giving local zoos and aquariums an exemption on supplies for an expansion.
Of the slew of measures before the tax-writing House Ways & Means Committee, only a handful are aimed at suspending tax breaks.
One measure would temporarily suspend the sales tax break on food and groceries to raise hundreds of millions in new revenue. Another would eliminate the $50 million income tax credit for donations to student scholarship organizations. Both, however, are considered long-shots in a Legislature that’s reluctant to raise taxes.
House Democrats also proposed Monday a plan to transfer control over collecting sales taxes from the state Department of Revenue to local governments. They say the plan could help the government collect more than $1 billion that now slips through the cracks.
But the plan will likely face a tough haul in the Republican-controlled Capitol. Gov. Sonny Perdue, for one, said Tuesday there are some “real complications” with the system and that it could create more problems than it helps.
There is growing momentum around another proposal, backed by Republican leaders, that would require the state to review the benefits and drawbacks of any new tax break after four years before it’s adopted again.
“I’ve asked for a cost-benefit analysis that hones in on the benefit,” said state Rep. Tom Rice, R-Norcross, who authored the constitutional amendment. “It’s a transparency in government act.”
The budget institute, which also supports the measure, said Georgia is one of only 11 states that doesn’t track the costs of the tax breaks each year.
“We pass these tax breaks, they’re on the books for years, but we never know exactly how much it costs,” said Sarah Beth Gehl, the institute’s deputy director. “And we never know if it’s doing what we intended it to do.”
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Associated Press Writer Shannon McCaffrey contributed to this story.
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On the Net:
House Bill 212 and House Resolution 30: http://www.legis.ga.gov
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