Perdue signs bill to create council to rewrite tax code

By JAMES SALZER

The Atlanta Journal-Constitution

Gov. Sonny Perdue signed legislation Tuesday to create a council to rewrite the state’s tax code over the next seven months.

The group’s work will be presented to lawmakers for a vote in January.

The council will be made up of lawmakers, economists and business representatives.

Lawmakers began looking at the code in earnest in recent years. First, rising property taxes brought calls to eliminate or greatly reduce property taxes. Then sales and income tax collections plummeted during the recession and lawmakers began talking about the unpredictability of the state’s tax system.

Legislators have long complained that the tax code – which includes hundreds of exemptions for special interests – was written decades ago for an economy that relied heavily on agriculture and manufacturing. Those remain important sectors of the economy, but Georgia, like other states, has also seen huge growth in service industries.

The council will likely consider putting the state’s 4 percent sales tax on all groceries. Some Republican lawmakers have indicated that they could support a grocery tax if there were a corresponding reduction in income or property taxes. The council also will look at eliminating at least some of the sales tax exemptions now on the books.

House Majority Leader Jerry Keen (R-St. Simons Island) said the aim of the commission is “to make sure Georgia’s tax code going forward meets the needs of the state but also allows for growth in jobs and makes sure individuals are treated fairly.”

The members of the council, as specified in the legislation, are Governor Perdue, Dr. David Sjoquist of Georgia State University, Dr. Jeffrey Humphreys of the University of Georgia, Dr. Roger Tutterow of Mercer University, Dr. Christine Ries of Georgia Tech, the 2010 chairperson of the Georgia Chamber of Commerce, the 2010 Georgia chairperson of the National Federation of Independent Business and two members each appointed by the Lt. Governor and Speaker of the House.

The Special Council on Tax Reform and Fairness for Georgian will conduct a study of the state’s current revenue structure. Following their study, the Council will make a report of its finding and recommend legislation to the Speaker of the House and the Lieutenant Governor.

Under the legislation, the Council will make a recommendation to the Special Joint Committee on Georgia Revenue Structure. The Special Joint Committee will then write a bill which will be voted on by the General Assembly without amendments.

This process is similar to the federal Defense Base Realignment and Closure (BRAC) Commission from the mid-2000s.

NFIB/Georgia, the state’s leading small business association with 7,900 members statewide, praised the legislation

“This is a big victory for small business,” NFIB Georgia State Director David Raynor said. “Small business is the heart and soul of Georgia’s economy and one of the challenges facing our entrepreneurs and small, family businesses is high taxes. We thank the governor for signing HB 1405 into law, and we thank the House and Senate leadership for making NFIB/Georgia a part of the reform process. The decision to put the chairman of the NFIB/Georgia Leadership Council on this council shows us that our elected officials understand the crucial role small business plays in Georgia’s economy and will play in its recovery.”