Budget geeks: Perdue should veto latest tax breaks
(We use “geeks” in the most respectful sense possible. Atlanta Unfiltered loves geeks. Here’s an opinion piece from Georgia’s very own budget think tank.)
By SARAH BETH GEHL/Georgia Budget and Policy Institute
The Georgia House of Representatives and Senate took some positive steps to address the $5 billion budget deficit, such as passing bills to raise almost $375 million in new revenues and to improve tax collections and transparency. The General Assembly also created a 2010 Tax Reform Council to examine Georgia’s tax structure and recommend improvements.
However, despite record revenue declines, the General Assembly once again passed long-term tax cuts ($624 million a year when fully implemented), disregarded other revenue options, and shifted the cost of government services onto middle class and low-income Georgians.
Gov. Perdue has been a good fiscal manager, and we hope he will exercise similar prudence this year as he reviews tax legislation. The governor has until June 8 to sign or veto these bills that could enact permanent revenue drains on future budgets.
Changes to our tax structure should not be debated and decided in the final hour of legislative session, especially ones with such a negative impact on the poorest Georgians. The Tax Reform Council is the vehicle to consider such fundamental long-term changes to the tax code.
HB 1023 includes a tax break primarily for Georgians with the top five percent of incomes, costing the state more than $350 million annually when fully implemented.
HB 1069 eliminates the refundable portion of the Low Income Tax Credit, reducing its value by two-thirds. The low-income tax credit, intended to offset sales taxes for the poor, refunds up to $104 to a family of four.
Ironically, HB 1069 gives a new tax credit for investors and gives them the ability to carry forward any unused credits to use for future tax years. Put simply, wealthy investors can use excess tax credits, but Georgians earning under $20,000 cannot use their excess tax credits.
If the governor vetoes House Bills 1023 and 1069, he will prevent revenue drains on future budgets and prevent shifting taxes onto Georgians earning the lowest 20 percent of incomes.
The Georgia Budget & Policy Institute, an independent, nonprofit think tank. The Institute’s goal is to build a more prosperous Georgia by rigorously analyzing budget and tax policies to inspire informed debate and responsible decision-making. Visit www.GBPI.org for more information about Georgia’s tax exemptions.