A year after the General Assembly approved two of the most significant tax bills this decade, lawmakers slowed the pace of tax-break legislation in 2019 after a string of sessions in which they seemed to never see a measure they didn’t like.
That slowdown could be in part because 2019 was a non-election year, and that may set up a taxapalooza in 2020, when all 236 General Assembly seats are up for election.
“Overall, it was somewhat of a slow year for tax policy. But it sets the stage for what stands to be an action-packed year in 2020,” said Danny Kanso, a budget and tax policy analyst for the Georgia Budget & Policy Institute, which annually puts together post-session lists of how much tax breaks cost the state and save beneficiaries.
The General Assembly also decided to pass a fairly watered-down version of transparency bills sponsored by state Sen. John Albers, R-Roswell, that would have mandated the state take a closer look at special-interest tax breaks before lawmakers vote on them.
It was far different than 2018. In that year’s annual session, lawmakers backed a bill cutting the top state income tax rate from 6% to 5.5% over two years and doubling the standard deduction. The change is expected to save Georgians hundreds of millions of dollars a year when fully implemented.
They also approved legislation requiring more online retailers to collect sales taxes from their customers, increasing state revenue by hundreds of millions of dollars a year.
Several special-interest tax bills were passed as well, as they usually are during legislative sessions.
This year, some of the biggest bills — measures to provide tax breaks for Delta Air Lines and other air carriers and CSX and other railroads, and others making new-economy companies such as Uber, Lyft and Airbnb collect taxes — stalled.
While in many sessions, lawmakers pass tax breaks worth $100 million or more, this year, the Budget & Policy Institute’s report — which is being released Thursday — found little to no change in state revenue from the bills that passed.
That wouldn’t surprise Senate President Pro Tem Butch Miller, R-Gainesville, who said, “Overall, it’s was probably about a wash.”
Kanso said it was difficult to come up with an accurate accounting this year because there were no publicly available fiscal notes — or cost estimates — available on about two-dozen tax bills. But most if not all of those were expected to have a minor impact.
One change Georgia consumers might feel is a measure that would reduce the tax rate they pay when they buy a car. The bill — which passed late in the 2019 session — also would change how some used cars are taxed. It is expected to save consumers about $33 million to $34 million a year if they buy a new car — about $100 on a $25,000 vehicle. But the change in how some used cars are taxed might make them more expensive.
Two bills by Albers would have required an economic analysis of proposed tax breaks before votes (Senate Bill 119) and reviews of those already in law but up for renewal (Senate Bill 120). Both bills overwhelmingly passed the Senate but stalled in the House. Eventually Senate Bill 119 was gutted and Senate Bill 120 was changed to a measure to allow the heads of the House and Senate tax-writing committee to request economic reviews of three tax breaks each year.
Often lawmakers approve tax breaks based at least in part on information provided by lobbyists for companies that would benefit. Albers’ bills, which also passed the Senate last year, aimed to make sponsors get a more independent and in-depth review of the bills before they could be approved. Democrats in the Senate have pushed similar legislation in the past.
Kanso said the public should expect the state to do a more thorough analysis of the tax breaks lawmakers approve.
“If we as Georgians value our tax dollars,” he said, “we should want as much accountability and transparency in the legislative process as possible.”
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