Mon., April 11, 2011 5:09pm (EDT)

Tax Overhaul Dies Surprise Death
By Jeanne Bonner and the Associated Press
Updated: 3 years ago

ATLANTA  —  
A tax overhaul that Republicans had promoted as a key part of their agenda is dead for the legislative session.

A joint legislative panel signed off on the bill Monday morning and it appeared headed to a full House vote the same day.

But the House adjourned without taking up the measure, which effectively kills it for the session.

Late Monday, House Speaker David Ralston said he could not be sure, based on data from Georgia State University, whether the plan would have raised taxes on some segment of Georgia residents. And he said he would not ask the House to vote if he could not be sure the bill lowered taxes for virtually all residents.

“I was not going to ask the members of the House to vote on this as long as there were significant questions on the quality of the data given to us by Georgia State to make very big decisions with.”

Ralston said he had the votes to pass the plan, which he said was "worrisome" because it means the measure would have passed based on faulty data.

The latest version of the plan would have reduced the tax rate from 6 percent to 4.6 percent next year, and then to 4.55 percent in 2013. But Democrats said new sales levies on telecommunications and auto repair would have increased the tax burden for the majority of Georgians.

Republican leaders introduced the latest tax plan at a committee meeting this morning. It would have created a $141 million hole in next year’s budget.

Supporters said rising state tax collections would have covered the shortfall. But Minority Leader Stacey Abrams, an Atlanta Democrat says while tax collections are up, they may not have been enough. Since the legislature is required to pass a balanced budget, she said that means more cuts in essential services are on the way.

“Those revenues are tied to services the public requires," she said of the $141 million hole. "We have gone past the point of cutting extraneous services. We are cutting into the crime labs, the school buses, major infrastructure.”

The state House had to pass the tax plan Monday so that the Senate could read it immediately. GOP leaders now say they will take up the bill either during the next session in January or during a special session this summer.


Contributors: Jeanne Bonner