By Guest Columnist State Sen. DOUG STONER (D-Cobb)
In little over a month, my fellow legislators and I will be returning to Atlanta to begin a new session under the Gold Dome. This will be my eighth session of representing my hometown of Smyrna and South Cobb County, including two in the House of Representatives and six in the Senate.
The coming session appears similar to my first session in 2003. Georgia was just beginning to recover from a recession, and revenues had dropped for 18 straight months. We had nearly exhausted our reserve funds and were facing a $600 million budget shortfall.
How did my fellow legislators, along with Gov. Perdue, confront this budget challenge in 2003? First, the new governor picked the most conservative of the three projected revenue estimates for the coming year. Second, the governor proposed a mixture of budget cuts and increases in tobacco and alcohol taxes.
It was a prudent, fiscally balanced approach that previous governors had followed. The reasoning behind this approach was to make necessary cuts in non-essential services during a recession, while reducing the cuts on vital state services, such as education and healthcare, which are always in greater demand during economic hard times.
Unfortunately for Gov. Perdue, his own party would not support him in the House. The then-Democratic majority passed the proposed mixture of cuts and a 25-cent cigarette tax increase without most of the Republican Caucus. This lack of support was due to Republican members’ desire to stay “ideologically pure” instead of joining us in governing the state’s fiscal affairs.
The Republican-controlled Senate followed suit by rejecting Gov. Perdue’s budget compromise with the House, cutting $400 million out of K-12, technical, and higher education funding. In the end, education cuts were restored to the 2004 budget.
Unfortunately, this was a sign of things to come. Since gaining control of the legislature in the 2004 election, this need by my Republican colleagues to base public policy totally on ideological purity, appeasing the 20 percent of the electorate that votes in a Republican primary, has repeated itself on many issues.
From attempting to criminalize promising stem-cell research on chronic diseases at Georgia universities and in the private sector, to the $1.2 billion in state funding cuts to our local school systems, my friends across the aisle seem to be driven by the most ideological of their supporters instead of the common good for the state.
Anyone who has worked with me in the General Assembly knows that I’m a bi-partisan problem solver. But I can no longer remain silent while this partisan prison that my colleagues and friends across the aisle have constructed threatens the future prosperity of Georgia and its citizens. This partisan OCB (obsessive compulsive behavior) has served to create a looming structural budget deficit by the middle of the next decade, leaving the state unable to fund basic government services or invest in desperately needed infrastructure for job creation and viability in this 21st century global economy.
So, you ask, when is Georgia going to become a southeastern version of California? By 2015, according to projections as recent as 2008, if we continue the fiscally irresponsible belief my colleagues across the aisle repeat to themselves and anyone who will listen that we can continue to give special-interest tax breaks and tax cuts with no impact on revenues.
My father, a very successful businessman, gave me some advice on one essential truth about life: there is no free lunch. However, my colleagues have created a belief in some citizens that they should not have to pay any taxes, and somehow their city, schools, and state will still provide services. Unfortunately, due to a recession that has lasted 20 months, the bill on the supposed free lunch for Georgia and its citizens will come due three years earlier than projected – in fiscal year 2012.
Let me give you a quick scorecard of what we faced in funding the 2010 budget. The Governor and the Republican leadership faced a $3.1 billion shortfall in creating the FY 2010 budget in comparison to FY 2009.
The governor and the General Assembly balanced the budget with over $2.2 billion in various reserve funds, Federal Stimulus dollars, and the elimination of the Homeowner Tax Relief Grant. These funds are non-recurring; therefore, they must be replaced over the next two years with another revenue source. This can only occur either from growth in current sources or adding new sources.
Otherwise, the only alternative is to cut as much as $2.2 billion on top of current cuts from the FY 2012 budget. We could start by updating our antiquated Department of Revenue, which, according to latest estimates, misses collecting nearly $1.6 billion a year in current taxes. We could also increase the cigarette tax to $1 a pack and raise between $300 million and $400 million a year, while also reducing teenage smoking.
My Republican colleagues have argued for years that we have a spending problem, but Georgia ranks in the bottom 10 states in per capita spending. They also argue that we can reduce the budget by eliminating waste and inefficiency, but Georgia has the highest performance management grade in the Southeast and is one of the top eight best-managed states in the country, according to Governing magazine.
What we have is a revenue problem. The Republican majority sees nothing wrong with giving away $1.5 billion in tax cuts and tax breaks to special interests, while at the same time slapping a $480 million tax increase (the largest in our state’s history) on everyday Georgians. The elimination of the Homeowner Tax Relief Grant is costing the average homeowner an extra $200 to $300 on an annual basis.
The special-interest tax breaks and tax cuts the Republicans are so fond of were created, for the most part, in the name of job creation. But there is no accountability on whether the purpose of those tax breaks is being fulfilled. Georgia’s unemployment rate is higher than ever. There are fewer jobs in our state now than there were at the beginning of this decade. And the Republican leaders at the Capitol call themselves “conservative”? No one in their right mind would run their private business or household budget in such a fiscally irresponsible manner.
We indeed have a revenue problem that can be solved only through fundamental tax reform, linking our budget needs to a 21st century tax system. We have to develop a fair and adequate tax structure that enables us to fund high-quality services and make long-term infrastructure investments in education, transportation and water resources if Georgia and its citizens are to prosper in the global economy.