Lawmakers this year weren't able to overhaul the state's tax system -- lowering income tax rates and raising other taxes -- but that didn't stop them from handing out tax breaks before the 2011 legislative session ended Thursday.
The House gave final approval to a bill that would continue a sales tax break for customers of companies such as Gulfstream that refurbish high-priced private jets.
Tacked onto that bill was a costly measure to give a sales tax break to businesses that build certain tourist attractions, entertainment centers, marinas, golf courses, hotel and conference centers, auto racetracks, and Georgia crafts and products centers.
And lawmakers alsopassed an extension of a fuel tax break for Delta Air Lines before they ended the session.
The measures came three days after Republican leaders gave up any hope of passing a tax overhaul that would have reduced the state's dependence on income taxes to raise revenue but charged sales taxes on more goods and services.
The tax break for jet refurbishing and maintenance would save customers of companies such as Gulfstream -- and cost the state -- up to $12.8 million next year. State officials couldn't determine the cost of the tourism tax break. But they noted that six projects on the drawing board or already approved would cost taxpayers -- and save the businesses building those projects -- about $50 million a year.
One of the biggest potential beneficiaries could be a massive sports complex proposed in Bartow County that has attracted some big-name investors, including former Atlanta Braves manager Bobby Cox and current manager Fredi Gonzalez. The project could cost $1 billion, and the developers could get $25 million a year in state refunds for a decade.
Rep. Earl Ehrhart, R-Powder Springs, is involved in the project. He recused himself from voting on the bill because his project would benefit.
The tax break for Delta would save the company $30 million over two years.
The shelved overhaul of the tax code grew out of a recommendation by a tax council to move the state away from income taxes and toward a heavier reliance on sales taxes.
Lawmakers had for more than a year also called for doing away with the more than 100 special-interest exemptions the General Assembly had added to Georgia's tax code, often at the behest of lobbyists.
But that didn't stop them from renewing some tax breaks and adding new ones.
"This is symptomatic of everything that is wrong with the way we do our tax policy," said Alan Essig, a former state budget analyst who runs the Georgia Budget & Policy Institute. "There is no rhyme or reason to it. It's all about who has the best connections. It is the opposite of reform."
But Rep. Ron Stephens, R-Savannah, who was pushing the Gulfstream and tourism tax breaks, said they are vital to retaining and creating jobs.
He said the tourism tax break -- which would offer refunds on a portion of the sales taxes the new attractions generate -- would encourage developments in Georgia “similar to Disney World.”
Rep. Mark Hatfield, R-Waycross, called the bill "legalized extortion."
House Speaker David Ralston, R-Blue Ridge, cast the deciding vote to send the bill to the governor.
The tourism bill failed to pass the House on its own earlier in the session. But it was added to the Gulfstream bill by the Senate Finance Committee. When Sen. Ronnie Chance, R-Tyrone, presented the Gulfstream bill to the Senate on Tuesday, he didn't mention the new tourism provision, an oversight that angered some of his fellow senators after they approved it.
The tourism bill had been approved in the past by the General Assembly, only to be vetoed by then-Gov. Sonny Perdue, who said giving developers blanket tax breaks would set a bad precedent.
Past versions provided for the tax break only for investments of more than $100 million, limiting it to major tourism projects. The new version would allow tax breaks on any investment worth more than $1 million.
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