Gov. Nathan Deal is trying to exert more control over the flurry of costly tax proposals that inevitably pop up every election year.
He gathered a panel of high-powered executives and influential bankers Monday to vet each proposal and come up with a range of findings to guide lawmakers next year and influence whether he signs or scuttles legislation.
But the revival of the “competitiveness” panel also raised concerns from critics who fear it’s simply a pretext to give extra juice to tax proposals he favors and short-circuit those he doesn’t.
“We worry this will be used selectively,” said Taifa Butler, a deputy director with the left-leaning Georgia Budget & Policy Institute. “If you look at this business-dominated group, it doesn’t really come off as a group that can act objectively. And their recommendations will carry significant weight.”
The panel first convened in 2011, and its findings supported tax breaks such the repeal of the state sales tax on energy used in manufacturing. Deal has credited that measure with landing recent carpet expansions in North Georgia, and he said Monday that it could help land Georgia more business in Japan and Germany, where there’s concern about energy supply.
But next year Deal and his GOP allies will face a more frenzied tug of war over finances in the run-up to the 2014 elections.
Eager for a piece of a surplus that could top $600 million, industries and nonprofits are vying for new or extended tax breaks. And state School Superintendent John Barge's bid to unseat Deal likely means there will be an increased focus on education policy and an emboldened call for the first teacher pay raises since shortly after the start of the Great Recession.
That helps explain why he reconvened the panel for the first time since late 2011. Deal said he made the decision partly because he wanted to inoculate taxpayers from highly politicized proposals in an election year. He urged the panel to “hash out what is good legislation and what is not quite so good.”
His critics point out his surprising decision to veto a bill in May that would have reinstated sales tax exemptions for food banks and health centers because it hadn't been vetted by the panel. That move came days after he signed a law that extended a sales tax break on Gulfstream aircraft parts that also hadn't gone through such analysis.
At the time, Deal's spokesman said the Gulfstream proposal, which would cost the state more than $5 million a year, was signed because it was a renewal of a tax break rather than a newly introduced proposal. Others, though, saw it as a double standard.
The members assembled Monday resemble a list of the state's business elite. Among the participants are Georgia Power Chief Executive Paul Bowers, Home Depot Vice President Carol Tome and John Watson, who was chief of staff to Sonny Perdue when he was governor.
They will have their work cut out for them. Members heard pitches from video game gurus seeking incentives to power up their industry, film buffs who want to preserve Georgia’s newfound success in the moviemaking ranks and music moguls who hope Atlanta can better compete with Nashville and Austin.
“We are seeing this talent base depleted as they leave for other cities with more favorable support systems,” said Michele Rhea Caplinger, the head of the Recording Academy’s Atlanta chapter. “It breaks my heart every day when I learn about someone leaving the state.”
And then there was the repeat bid by Bill Bolling of the Atlanta Food Bank to secure tax breaks on food for emergency disaster and hunger relief that expired between 2010 and 2011.
Those incentives were part of a broader bill that also exempted the sales tax for items purchased by volunteer health clinics and Goodwill's job training service, and with a price tag of about $2 million a year, they earned overwhelming legislative support before Deal vetoed them. Bolling told the panel that the tax breaks on food banks alone would provide an additional 800,000 meals.
The competition puts the panel in a bind as it works to hash out its recommendations before the start of the legislative session in January. Chris Cummiskey, the economic development commissioner who organized the meeting, said he has no marching orders from Deal on what proposals to seek.
“There’s not a proposal I heard up there today that I wouldn’t love to do for Georgia,” Cummiskey said. “But we have to pick and choose. We’ve got to look at what gets the most bang for the buck.”
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