A far-reaching tax measure approved by Georgia legislators is now on its way to Georgia ballots. It’s actually not a bill; it’s a constitutional amendment. And it would bar the General Assembly from increasing the state income tax.
Currently Georgia's top rate is six percent, and that’s likely where it will stay after Nov. 4 if voters approve the cap.
Supporters say it will make the state more attractive to business. Foes, however, decried the bill as an election-year ploy. And some warn of dire consequences that at this point cannot be avoided.
“This ties the hands of future General Assemblies,” said Alan Essig of the Georgia Budget and Policy Institute in an interview. “It will be almost impossible to change this. I’m sure this will pass on the ballot. And once it is in the Constitution, you will never get two-thirds of voters to put it back on the ballot and then repeal it.”
As if to underline his point, he added, “It permanently limits future options for raising revenue.”
And he fears it’s the first step toward drastic reductions in the income tax rate.
Rep. Chuck Sims of Ambrose was one Republican who voted against the measure in the House. He said Georgia has to pay for schools, roads and law enforcement, among other items, and will simply have to make up the money on other taxes.
Great Fiscal Policy or Great Political Policy?
Sims said balancing the mix of taxes Georgia collects is a delicate matter. There was nothing delicate, though, of how he described the bill and why many support it.
“It’s a great political policy,” he said. “It’s just not real good fiscal policy.”
That’s easy for him to say: Sims isn’t running for re-election.
Gov. Nathan Deal declined Wednesday to comment on the bill until he’s seen it, even though he won’t have to sign it.
Rep. Terry England, the House Appropriations chair, however, denied it would tie the state’s hands.
“It’s been at six percent for as long as I can remember and we’ve managed through it,” he said in an interview. “We managed through this last recession, the biggest one we’ve seen in our lives, without having to do anything with the income tax.”
But England did caution that the state should tread lightly in contemplating reducing the income tax.
“When we deal with our bonding agencies that we talk to, they like looking at our mix,” he said. “They like having a solid base spread. That keeps Georgia with triple-A bond rating.”
And then he said, “I think you have to be very, very careful if you ever do start rolling the state income tax back from the six percent, you have to make sure you have a level playing field, a good level table, for what you're going to use for revenue sources.”
As observers have said, the bill is political. But it doesn’t simply pit Democrats versus Republicans. That’s because, much to the chagrin of the Democratic Party of Georgia, two Democrats in the House voted for the measure, and at least one in the Senate: Sen. Jason Carter.
He couldn’t be reached for comment Wednesday. A spokeswoman said the vote took place a month ago, although it's unclear if the time frame matters.
Surprises Still In Store
Georgia legislators worked over-time Tuesday to pass sweeping bills involving abortion, Medicaid, healthcare and guns.
That means they'll spend Thursday, the final day of the 2014 session, largely sorting out minute changes made to bills as they passed from chamber to chamber.
They are expected to tinker with a gun bill before it would go to the Gov. Nathan Deal’s desk for his signature.
A few key bills remain in limbo, chief among them the so-called medical marijuana bill. It would legalize cannabis oil, not recreational marijuana for treatment of a rare, debilitating seizure disorder. It’s gone through a number of changes since Macon Republican Allen Peake introduced it, and the Senate has yet to vote on it.
Even though many of the key measures have already passed, lawmakers are expected to debate bills all day. They will likely go right up until midnight when by state law they must gavel out of session. Pack yourself some snacks - it’s going to be a long one.