After the shouting was nearly over on Tuesday, and those still of sound mind had begun plotting their escape from the state Capitol, Gov. Brian Kemp took a moment to defend his state’s business climate.
“Our business environment is good. We cannot change our values of who we are for money. And we’re not going to do that. That’s what makes our state great,’ the governor told a reporter.
Not long afterward, Kemp was contradicted by state Sen. Nikema Williams, who doubles as chair of the state Democratic party. “You can’t just say you’re the No. 1 state to do business. You have to live those values,” she said.
Both Kemp and Williams were focused on House Bill 481, the “heartbeat” measure that would ban nearly all abortions in Georgia. And we will see what happens, politically and economically, after the governor signs it.
But if you wanted to make the case that this was the session that saw the business wing of the state GOP trounced by identity politics, Delta Air Lines is your better example.
Textbook, in fact.
On Tuesday morning, the 40th and final day of the session, Governor Kemp and a small entourage left his second-floor office and paid a personal visit to the 35-member Republican caucus that controls the Senate. Several issues were hanging.
Kemp told the lawmakers that he knew the fight for and against a state takeover of Atlanta’s airport would go unresolved, and he was okay with that. The governor also accepted that senators were ready to deep-six a House plan to allow local governments to use a sales tax to finance regional bus systems throughout the state.
The single thing that Kemp, the most powerful figure in the state Capitol, required on this final day was a proposed jet fuel tax break for the state’s largest private employer — and other airlines, too.
He left empty-handed. It was a rebuff rarely delivered by members of a governor’s own party.
There are 21 Democrats in the Senate. Very likely, all would have backed the Delta bill. But the governor was denied even the eight GOP votes it would have taken to build a successful bipartisan alliance.
This wasn’t just a “no,” as one senator put it. “This was a ‘Hell, no.’”
Some exposition is required. In 2016, North Carolina suspended its sales tax on jet fuel. Since then, cargo traffic in that state’s airports has increased by more than 25 percent. The number of passenger seats filled has increased by 6.6 percent.
Given that fuel is Delta’s second-largest expense, the airline began the search for something commensurate in Georgia, where the tax stands at 4 percent.
The airline passed out figures generated by University of Georgia economist Jeffrey Dorfman. Eliminating the jet fuel tax in Georgia, Dorfman calculated, would boost job growth in the state by nearly 22,000. An extra 2.3 million passengers per year would walk through Hartsfield-Jackson International Airport.
You can wax philosophical about whether such targeted tax exemptions are proper. Many state lawmakers do — but only when it is convenient. The point is that tax cuts are what Georgia GOP lawmakers do. It’s in their DNA, or has been.
Delta sought that tax break last year. Then came the Valentine’s Day massacre at a Parkland, Fla.
Delta tried to put some air between itself and the National Rifle Association. Lt. Gov. Casey Cagle, on the brink of a run for governor, and other Republicans took offense.
The tax break died. And then was implemented by Gov. Nathan Deal by executive order. This was something of a gamble. Lawmakers would have to ratify the action during a special November session of the Legislature. They did, but a deal of arm-twisting was required, and that left some marks.
That particular jet fuel tax break will expire June 30.
Once lawmakers had gathered anew in January, the newly installed Governor Kemp had House Bill 447 introduced. It would lower the state’s jet fuel tax by .5 cents for 20 years.
The bill passed the House with 140 votes. And then the Senate Finance Committee took it up. On a 5-4 vote, the Republican-dominated panel tacked on an excise tax for jet fuel, raising Delta’s costs.
Let that sink in. A group of GOP senators, at an open meeting, voted to increase taxes on airlines. The formal justification was to use Delta’s largess to send more funding to airports in rural Georgia — a rather thin excuse.
Delta warned that the move could cause commercial aviation to “grow somewhere other than the state of Georgia.”
But the Delta fight was no longer based on rational economic theory. State Sen. Burt Jones, R-Jackson, had achieved great success in tying Delta’s bid for a tax break to SB 131, his measure to effect a state takeover of Atlanta’s airport — something that Delta and virtually every major corporate power in metro Atlanta opposed.
The Senate passed the measure on March 7, two days after the House had passed the Delta tax break — a signal that one was now hostage to the other.
The House, led by Speaker David Ralston, offered an airport oversight committee to assuage those worried about current and past corruption eruptions at Atlanta City Hall. The Senate rejected it, and the airport issue was ushered off the stage. For this year, anyway.
The House made one more pass at the Delta tax break, by shoe-horning it into SB 200, along with the rural transit package. This, too, would eventually die. But it got as far as a conference committee.
The make-up of the committee was important. Anti-Delta sentiment had apparently spread to the House. We suspect this because one of that chamber’s three assigned conferees was state Rep. Calvin Smyre, D-Columbus, a sign that Democratic votes might be needed by night’s end.
In the end, those votes weren’t needed. The Senate Republican snub of Brian Kemp held.
It is possible that this episode was a leftover morsel of revenge. Most Senate Republicans had backed Casey Cagle in the primary. If that’s the case, a few vetoes by the governor, line-item or otherwise, will even the score. Wounds will heal.
But if this is a true shift in Republican thinking, from broad-based, financial conservatism to a zero-sum, rural vs. urban contest, then corporate Georgia must take note.
Alliances will have to be broadened well beyond a lone governor and his ruling party.
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