Speaker Ralston not giving up on tax reform; unsure about changing pension fund policy
By Maria Saporta
Tax reform is still top of mind for Georgia House Speaker David Ralston.
Ralston was the breakfast speaker of the Commerce Society Thursday morning, when he provided an overview of what was in the works during this year’s legislative session.
In 2010, Ralston helped establish a Tax Reform council of business leaders and economists to look at how Georgia “could become the most competitive state in the nation in terms of jobs.”
The council went around the state to get public input before putting forth a set of recommendations that were presented to the state legislature for the 2011 session.
“We got it into the red zone, but we couldn’t get it in the end zone,” Ralston said. “I was determined we were not going to turn the ball over, and we were going to continue pushing.”
Although the tax reform recommendations did not advance last year, Ralston said that progress was being made on several of the recommendations. Most notably, he said there was an emerging consensus to repeal the sales tax on energy for manufacturing — a tax that hurts Georgia’s ability to compete with other states.
If the energy tax is repealed, Ralston said a glimpse of the future occurred a couple of weeks ago when Caterpillar announced that it would be locating a plant near Athens that would employ 1,400 people.
“Caterpillar is the largest private employer in Illinois,” Ralston said, adding that the Illinois tax structure is hurting that state’s ability to compete. “They (Caterpillar) have threatened to move out of there.”
Later, Ralston was asked about whether other portions of the tax reform package would ever be passed.
Ralston responded that leadership takes patience and persistence.
“I hope that whatever we get done this year in tax reform — that it’s not the end of reform,” Ralston said. “I’d like to push very hard in getting the individual (tax) rates down. I don’t expect that now.”
But he added that he believes “those will be on the table in a very serious way” in future years.
After his talk, Ralston was asked about his views on allowing the state’s pension funds to make alternative investments. Georgia is the only state in the nation that does not give its state pension funds the ability to make such investments.
A bill that would change that regulation recently passed overwhelmingly in the Georgia Senate, but now it needs to get approval in the House.
“I haven’t seen the bill,” Ralston said. “My view historically has been one of caution. I think we have to be conservative. I will take a look at the bill.”
Asked whether it bothered him that Georgia was the only one of 50 states not to allow alternative investment of pension funds, Ralston said: “No.”
“We have had a very sound retirement system here, and our goal is to continue that,” Ralston said. “I’m not endorsing or opposing it.”
Then the speaker added: “Flexibility is certainly desirable.”
State economic development leaders have been hopeful that a bill will pass this session. Such bills have been introduced for years, but they have always died somewhere along the way.
Chris Cummiskey, commissioner of the Georgia Department of Economic Development, was asked about the state’s pension fund policy at a national conference Wednesday held on the Georgia Tech campus on the Georgia’s future of manufacturing, logistics and competitiveness.
Cummiskey said that flexibility in pension fund investments would help attract more venture capital to Georgia. He said he was pleased that the bill had passed the Senate, and now it was up to the House.
Cummiskey then added: “If it does pass, it would check off an important box going forward.”