I have watched in amazement as the discussion about Georgia’s tax structure has unfolded.
Those who promise that changing what we have will somehow magically create thousands of new jobs are either badly misinformed or just seeking to lower their personal tax bill.
Georgia is a low-tax state. It is a competitive state in overall business climate, ranking fifth on Site Selection’s list and eighth on the Forbes list.
Just last month CEO Magazine rated Georgia fifth in its ranking for doing business.
My professional experience includes being the state Economic Development director in South Carolina and Mississippi and the COO of Georgia’s Governor’s Development Council. My firm, Market Street Services, has worked on Economic Development strategies in 30 states and 130 communities since 1997.
We can assure everyone that Georgia does not lose projects because of “high taxes.” We have a stable and fair system.
Even with the loss of thousands of jobs during the Great Recession, we have a solid tax mix that has done better than most.
For example, to suggest that Texas is a model is folly. Not only are the economies fundamentally different, they face a $27 billion deficit in 2011, representing 15 percent of their entire biennial budget.
Most economists agree that sales taxes are the most regressive tax around; to again make Georgians pay sales tax on the essentials of food and drugs is just bad policy.
There is one thing that does cost Georgia new jobs and opportunities every day. That is our pre-k to 16 educational attainment and performance. More than 15 governors visited us in the 1990s to study the HOPE scholarship, which has been viewed by many as Georgia’s No. 1 economic incentive and, over the years, many states have attempted to copy it.
Every effort should be made to find revenue sources to fund HOPE fully into the future; that includes lowering the “profit margin” of the lottery.
We used to lead the nation in our pre-k efforts. Now we have fallen back in the pack. We led the South in teacher salaries and now we have dropped back. Our educational attainment in test scores and graduation rates rank in the bottom five states. On July 16, the Economist contained an article titled “Atlanta’s Public Schools — Low Marks All Around.”
This is just one of the hundreds of national and international stories about the scandal in our schools. This past Thursday the Wall Street Journal featured an article on eighth-grade reading and math. Georgia was the third-worst state (15 points below “basic” in mathematics) and the second-worst state (behind Texas) with 35 points below basic in reading.
Georgia funded the Georgia Research Alliance without interruption for nearly 20 years. Again, this is a model program dedicated to building Georgia’s capacity with world renowned scholars and scientists. Now we have slashed that budget, too.
It is important to remember that our competition is not limited to the southern states; it is, in fact, the entire world.
We cannot “cut” our way to prosperity. State funding of vital educational programs at all levels already has been reduced beyond the crisis point. One technical college president told me recently that the state provides only 38 percent of his school’s current budget needs.
At some point Georgia needs to understand that a quality work force and talent retention and recruitment are the keys to a positive economic future.
Tinkering with the tax structure is simply the wrong priority. Fighting for and funding quality education from pre-k on up is the right priority.
J. Mac Holladay is CEO of Market Street Services in Atlanta.
About the Author
