The Georgia General Assembly has been quiet the first week of the session as they took a five-day recess to pick through Gov. Nathan Deal’s $19.2 billion FY 2013 budget. While initial outlays for education, both at the K-12 level and post secondary look good, it has yet to pass muster in the House and Senate, two bodies that have shown a disdain for public education.
While we will track the progress of the budget (the only thing lawmakers are required to pass), there are other aspects relating to the budget that thus far have kept a low profile.
HB 387 is a tax proposal everyone should keep their eyes on. It replaces last year’s effort, HB 385, to introduce consumption taxes. According to the Georgia Municipal Association, a substitute version of the bill is already headed for a vote by the Special Joint Committee on Georgia Revenue Structure, and here’s why it must be examined.
Remember last year’s proposal to tax the person-to-person sale of cars, boats and planes? It’s back. Take your vehicle to the shop for repairs, be prepared to pay a sales tax if this bill is adopted as written.
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The substitute bill would hit our cable and wireless devices we use daily with a 7 percent excise tax, and that’s not all. What is of most concern to local governments, the bill would eliminate local franchise fees and split the 7 percent fee with half going to the state and half going to local municipalities. While such a plan would simplify the franchising process for telecommunications and cable companies, it could be a financial headache for municipalities, even with a provision that is supposed to protect local governments from the loss of those fees. Unfortunately, the state has a poor record of doing what it says it will do with money collected.
Another concern for local governments is the provision to strip the sales tax from energy used in manufacturing. Kenneth Turner, the mayor of Gordon, thinks the move will cut revenues, when coupled with the shift from property taxes to sales taxes, “3.5 percent to 5 percent.”
On the other side of the ledger, personal income taxes would drop from 6 percent to about 4.5 percent. This time around, cigarettes, food and prescriptions would get a pass.
This issue is not going away. Voters will have to decide whether the cut in personal taxes is enough to pay all the added taxes. Chances are, that’s not going to happen as the General Assembly attempts to shift the tax burden from those who have to those who have not.
-- Charles E. Richardson, for the Editorial Board