Money, proposed tax break take front seat in Georgia Legislature’s closing weeks
By Maggie Lee
It won’t be until the last days of the Georgia legislative session that there are settlements on teacher pay raises, budget cuts or tax cuts.
One of the last weeks of the session started Monday with the House’s top budget-writer repeating “no to the reductions,” as he presented a line-by-line review of House amendments to Gov. Brian Kemp’s state spending plan for the year that begins in July.
Georgia House Appropriations Committee Chairman Terry England, representing his committee’s budget consensus, said “no” to cutting budgets for accountability courts, GBI forensic science labs and most of the cuts Kemp proposed to county public health grants, among other things.
The House is finding money to reverse those cuts in part by giving a partial “no” to Kemp’s proposal for $2,000 teacher raises. The House budget would give teachers a $1,000 raise.
“Talking with their teachers around the state, they have all said … ‘We appreciate the idea that the governor has on the $2,000. However, there are other state employees out there that we realize are having a hard time,'” said England, an Auburn Republican, predicting patience on the part of teachers.
Instead, the House would spend more on things like raises for high-turnover jobs in corrections, child welfare services and other areas.
State Rep. Calvin Smyre, a Columbus Democrat, said he’s pleased with the rearrangements in the budget approved by House Appropriations Monday. But he also said the state’s weak revenues are pushing the budget in to “uncharted waters” and caution is in order.
“I strongly feel that our teachers should get the pay raise. It’s just a matter of how much and when,” Smyre said.
The state’s revenues are weak in part due to an income tax cut approved by the Republican-controlled Legislature in 2018.
The bottom-line $28.1 billion figure is the same in both draft budgets. It will be in the state Senate’s draft budget too, which is under discussion now.
And House leadership announced support of a tax code rewrite just hours after the House Appropriations Committee approved that budget.
It should mean lower taxes for all Georgians, said House Speaker David Ralston.
“The centerpiece is that we will lower and flatten Georgia’s income tax brackets … to a single rate of 5.375 percent,” said the Blue Ridge Republican.
In practice, Georgia’s personal income tax rate is very flat now, because the tax brackets are narrow bands under $10,000.
Under the new plan, lower-income people would qualify for an income tax credit that would in practice mean a lower rate than high-income folks pay.
The GOP leadership proposal also includes a tripling of the adoption income tax credit to $6,000 per child per year.
Overall, those changes would amount to about $272 million dollars less revenue for the state — less money to pay its next budget.
However, the House is also working on eliminating a so-called “double” deduction, under which taxpayers deduct their state income taxes from their taxable income. The Atlanta Journal-Constitution has reported that ending the double deduction would raise something like $130 million to $220 million per year.
The state House Ways and Means Committee approved that House Bill 1002 eliminating the double deduction on Monday. With some “no” votes, the committee also approved a separate House Bill 949 that wraps up all the pieces of the tax rewrite package.
Ways and Means Committee Chairman Brett Harrell, R-Snellville, said that the state can bank on more money in the coming years via things that aren’t reflected in the budget yet, like a new tax on some sales made through apps and websites, and better software at the Department of Revenue that’s supposed to find under-reported revenue.
“There are a number of initiatives that are good policy that result in additional revenue to the state, and that are not factored in on the revenue said,” Harrell said a few hours before the vote. “Which I think will reduce any likelihood of undue pressure on the budget.”
But state Rep. Debbie Buckner, D-Junction, said she’s concerned about moving so many changes to the tax code in what’s been a difficult budget year.
“I just can’t help but wonder if doing so many changes … is not a risky thing to do,” she said.
Time will tell if Georgia even ever sees who’s right. After a Thursday deadline, it becomes much more difficult for this legislation to become law this year if it hasn’t yet passed the House. Then it’s got to get through the state Senate.
The Georgia House and Senate have already finished 26 of their annually 40 working days, and normally wrap up a consensus budget proposal for the governor by late March or early April.