As this election-year General Assembly nears, the state of Georgia finds itself in much better shape than many of its citizens.
State budget reserves are still flush from the windfall that came with the reopening of the U.S. economy after the COVID shutdown, with about four times the money the reserves held five years ago. Even though University of Georgia economists cautioned recently that the state’s economy will grow only a little faster than the U.S. at large this year, revenues have exceeded projections for the past eight years.
Meanwhile, more than a million Georgians saw their healthcare premiums rise dramatically on Jan. 1. Cuts in the federal workforce are hitting home in Atlanta. The future of the electric vehicle industry has grown more uncertain. And the state continues to rank near the bottom in any health care ranking you want to look up.
In another election year, we might be expecting to see more legislation aimed at spending money aimed at fixing the state’s problems, or at least tucking in enough money to buy uniforms for the local high school band. But this is the Year of Affordability, both nationally and in legislatures across the country.
The big fight under the Golden Dome will probably be Lt. Gov. Burt Jones’ effort to eliminate the state income tax, which will be cast, we can be sure, as an affordability issue. The problem with that spin is that the Georgians having the hardest time affording things aren’t those who stand to gain most from the elimination of the tax, which has been going down anyway.
In addition, we’re going to hear all kinds of income tax and property tax-cutting ideas in the upcoming session and the election campaign that continues afterwards. The Republicans will be more uniform in their approach, and the Democrats will be more nuanced, targeting tax breaks to the poor or the elderly. In both parties, it’s less a question of whether to cut taxes, but of whose to cut.
Cutting taxes is never going to be unpopular in an election year. But after the Public Service Commission’s unanimous vote to approve Georgia Power’s nearly 10-gigawatt expansion to accommodate the growing needs of data centers, it’s hard to take seriously any of the measures under consideration as answers to the affordability problem. Georgia Power’s assurances that the expansion will actually reduce rates — for a while — haven’t calmed the worries raised that consumers will ultimately foot the bill for this unprecedented increase.
Last year Gov. Brian Kemp vetoed a bill that would have imposed a two-year pause on the tax breaks previously passed to encourage data center expansion and established a commission to look at the overall impact of data centers on the grid. Another bill that would have shifted the costs of transmission lines and other equipment built specifically for data centers died in committee.
There’s a good chance there will be more legislation this year. Data center development has grown to the point where Pat Wilson, commissioner of the Georgia Department of Economic Development, warned in an interview with the Atlanta Journal-Constitution that data center developments are squeezing out other developments that create far more jobs.
The state has been “a victim of our own success. We’ve filled up a lot of our great sites,” he said.
When they have finished helping to lift the burden from all of us taxpayers, what to do about data centers is likely to be the issue that preoccupies the session, right up to sine die. But in an election year, with so much money sitting there and a governor in his final session, who knows what mischief might arise?
