Economic development: Look beyond tax cuts

Georgia’s next governor will hopefully be able to speak of the Great Recession in the past tense, but won’t have to look far to see its lingering effects — scrawny tax revenues and high demand for services.

How well Georgia balances its budget while seeding economic development will affect our prosperity for years to come. It’s become fashionable for fiscal conservatives to trumpet that growth will sprout like kudzu if we but cut taxes further. The risk, and practical effects of that assertion, are tempered by the growth in federal dollars crammed into the state budget. Washington’s contribution here has increased by about 85 percent since fiscal 2003, according to The Atlanta Journal-Constitution’s James Salzer.

Yes, low taxes are a factor in fostering economic progress. A factor isn’t an entire formula, though, and relying on tax cuts to the exclusion of other relevant inputs is overly simplistic and puts us at risk of losing ground to competing states that use a bigger mix of variables.

The Tax Foundation this year ranked Georgia 29th among states on its business tax climate index. We could do a bit better, but we’re not an anti-business, tax-and-spend state.

More importantly, even the Tax Foundation admits that “there are many non-tax factors that affect a state’s business climate.”

Georgia’s not exempt from that truth. In areas such as education, for example, we’ve got a lot of work to do to consistently produce graduates who meet the needs of tomorrow’s workforce.

We need greater balance, consistency, common sense and breadth in our economic development playbook going forward.

Andre Jackson,
for the Editorial Board

Atlanta Forward: We look at major issues Atlanta must address in order to move forward as the economy recovers.

Through July 18, The Atlanta Journal-Constitution’s Sunday editorial pages will focus on major issues facing the state’s next governor. The questions mirror themes of our Atlanta Forward project.