Deal presses lawmakers for tax plan, new reservoirs

ATHENS -- In his first major speech to state lawmakers, Gov.-elect Nathan Deal on Tuesday made a strong call for legislative action to build new reservoirs and aggressively promoted his campaign promise to cut the corporate income tax rate.

Deal, giving the final speech of a three-day conference for lawmakers at the University of Georgia, used the platform to give the first real peek at his legislative priorities when lawmakers return Jan. 10. But, he made clear that those gathered for his speech weren't going to get everything they wanted.

"I sort of had the feeling maybe like one of those department store Santa Clauses, with that big bag on his back and all the children wanted to know what was in the bag," Deal said to more than 200 lawmakers, lobbyists and aides. "I'm not going to tell you. I don't want to spoil your Christmas."

But, Deal was his most specific since the Nov. 2 election in calling for action. On the water dispute with Florida and Alabama, Deal revealed that he has met twice with the incoming governors of those other states and said Georgia cannot afford to wait for a potential water-sharing agreement with its neighbors.

He said action must be taken on new reservoirs, despite the state's potential $2 billion budget hole.

"Now is the time for us to stop talking about that and start doing that," he said. "I put that in the context of these very difficult economic times but I do think it has that kind of priority."

Afterward, House Speaker David Ralston, R-Blue Ridge, agreed and said financing might have to be "creative."

"I've heard discussions about public-private partnerships," he said. "That's something we might want to stress."

Deal said after his speech that it might require the state to borrow the money for reservoirs through a bond sale.

In his remarks to lawmakers, Deal was also emphatic that his plan to cut corporate income taxes is a key method of spurring job creation. His remarks came just after the head of a special council studying the state's tax system said businesses make decisions based less on taxes than on the quality of the work force, the education system and quality of life. The council must issue its recommendations for changes to the tax code by Jan. 10. They are widely expected to include a sales tax increase and possible reduction of other levies.

"Whether we agree with this tax or another tax, we know that in the aggregate the tax climate of our state has an impact on whether or not we are viewed as a place that can grow jobs and whether or not we can recruit," Deal said.

Deal said he spoke recently with a friend who is a large employer and wants to expand his business and create 8,000 jobs.

"He made a comment to me that it was probably between Georgia and Tennessee and when he looked at it in terms of the corporate tax differential that we were at a disadvantage," Deal said. "A lot of people say, well, businesses don't decide where they're coming based on your corporate tax structure. Well, this one does."

A.D. Frazier, who is chairing the tax council, said afterward that Deal has strong opinions on the subject.

"He believes that way and I'm sure he's right to a certain extent," Frazier said.

The real measure of the impact of any tax on job creation can be as much perception as reality, he said. If an employer says he won't come to Georgia because of the corporate tax rate, then it's a problem, Frazier said, "and we have to deal with it."

Deal's remarks received largely positive response from lawmakers.

"The message I took away was clearly he's laying out a framework of what his priorities are," Lt. Gov. Casey Cagle said. "He's going to be willing to make investments in strategic areas that are going to help."

Rep. David Knight, R-Griffin, a key lawmaker on tax issues, said Deal must continue to provide leadership.

"I believe we're going to have a great session," Knight said.

But Sen. Nan Orrock, D-Atlanta, questioned Deal's priorities, noting that he had previously warned that cuts to K-12 education might be necessary.

"The governor [elect] promoted corporate tax cuts but said we're going to have to make cuts to education," Orrock said. "I think that's the wrong approach. Continuing to cut education is a lose-lose."