A bill that seeks sweeping changes to the state's tax code will apparently encounter limited resistance in the state Senate on Thursday as Republicans and Democrats appear willing to move the fast-tracked bill to the governor.
House Bill 386, a 50-page plan to change nearly every section of tax law -- and affecting nearly every state taxpayer -- was introduced Monday, passed the House on Tuesday and is set for final vote in the Senate on Thursday. Democrats, and some Republicans, lamented the rushed course the bill has taken and questioned its ultimate outcomes, but they said there is much to approve of in the plan, as well.
Meanwhile, even those who have had time to study the bill say it's nearly impossible to estimate its impact on state revenue and on taxpayers.
"I hope at a minimum it's revenue-neutral over time, but there's no telling at this time," said Alan Essig, a former state budget analyst who runs the Georgia Budget and Policy Institute.
According to Georgia State University, which provided the official statement on the fiscal impact of the plan, state tax revenue would decline about $53 million this year and $36 million in fiscal 2014 before rising slightly in 2015. Local governments, which benefit from the car property taxes, sales taxes on energy and other levies, would lose up to $217 million total. But state officials have promised to share some of Georgia's take so local governments don't bear the brunt of the tax cuts.
Supporters of the legislation have said it would help Georgia compete for jobs and ease the tax burden on families. The bill would:
- Add tax exemptions for energy used by manufacturers, farm machinery and supplies, and airline fuel.
- Restore sales tax holidays for school supplies and energy-efficient appliances.
- Do away with property taxes on cars titled after March 1, 2013. The legislation calls for a one-time title fee rising from 6.5 percent in 2013 to 7 percent in 2015.
- Increase the personal state income tax exemption for married people filing jointly from $5,400 to $7,400. The GSU analysis said that would save married Georgians $362 million over three years.
- Cap nonwork income that seniors can exclude from income taxes at $65,000, or $130,000 per couple. That would cost high-income taxpayers about $92 million over the next three years.
- Collect sales taxes from more Internet sales, which would raise more than $80 million for state and local governments.
- Provide manufacturers and agribusinesses more than $200 million in tax breaks over the next three years.
The bill passed the state House 155-9, with Democrats largely crossing over to vote for the GOP-written plan. That appears likely to happen in the Senate, as well. Democrats on Wednesday said they were concerned with pieces of the plan and with the process in which it has been propelled through the General Assembly. But, several said, there are positives to the bill.
"The problem with the process is we're still trying to figure out the content," said state Sen. Jason Carter, D-Atlanta. "On the whole, on the balance, it's probably a good plan even though it's clearly convoluted."
Sen. Nan Orrock, D-Atlanta, agreed.
"It's moving horribly fast, and there are huge questions about the math," Orrock said, before adding that she supports the Internet sales tax provision. "A bill of this size and this consequence to be first introduced on Monday and pass the House in 24 hours and in four days they bring it to the Senate -- it's not a sound approach."
Some Republicans, too, said they had not yet read the entire bill. But they are less concerned with the bill's path to approval.
"My initial opinion is positive," said Sen. Charlie Bethel, R-Dalton. "I'm not all the way through it, though. There are some provisions in there to help grow Georgia's economy, help create jobs."
The effort to overhaul the tax code began two years ago, Bethel said, with the creation of a special committee of academics and business professionals who delivered a plan more than a year ago. Lawmakers spent much of 2011 considering the plan only to see it fall apart in the final days of that year's session over questions about the estimated impact on state revenue.
Calling this a rushed process, Republicans said, ignores that comprehensive review.
"Most of the aspects of this bill have been discussed really since last year," said Sen. Josh McKoon, R-Columbus.
McKoon favors the bill because of the energy tax credit for manufacturing, which would help Kia's automobile plant in his district.
"That is the overriding feature and most important thing we can do," McKoon said.
Support, however, is not universal. Sen. Barry Loudermilk, R-Cassville, said he remains unsure of how he'll vote. He said he's still examining the bill.
"There are parts I like, parts I really like and parts I don't like," Loudermilk said. "What outweighs the other, I don't know yet."
Loudermilk said he's not satisfied with the car tax changes and the Internet sales tax.
The tax plan will be introduced to the Senate with an up or down vote, meaning it cannot be amended on the floor.
If senators have questions or concerns about the process, the best thing they can do is slow down and wait, said Lee Libman, a Gwinnett County business owner.
"I'm a little hot under the collar," Libman said, echoing concerns from tea party activists that the bill was being "rammed" through the process. "Better that it never gets done than we have something we're sorry for down the road."
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