Lobbyfest 2023 is about to break out at the state Capitol.
A joint House and Senate study panel on Wednesday will begin its review of special-interest tax breaks that cost the state — and save some individuals and businesses — billions of dollars.
The review will include the more than $900 million-a-year film tax credit, which state auditors call the most lucrative such incentive in the country.
Statehouse lobbyists have called the panel the “Lobbyists Full Employment Act” because businesses hire lobbyists who advocate for tax breaks and protect them.
“I would venture to say that they ought to move this from the Capitol to Mercedes-Benz Stadium,” said John Watson, a lobbyist who represents several clients highly interested in the proceedings. “If there were any deficit in revenue, the state could make it up by charging $5 a head at these hearings.”
Ahead of the hearings, film industry advocates last week put out a lengthy report compiled by the Georgia State University Creative Media Industries Institute touting the benefits of the film tax credit. Backers say the tax break has led to a mushrooming of the movie and TV production industry in the state that brought $4.4 billion in direct spending here last year.
The report, among other things, points out the growth in jobs from the “creative media” industry in areas outside of metro Atlanta. That’s important politically because almost all of the General Assembly’s majority Republican leadership comes from outside metro Atlanta.
State auditors have said in the past that supporters have inflated the impact of the tax credit.
Senate Finance Committee Chairman Chuck Hufstetler, R-Rome, a co-chairman of the study committee, has proposed putting a $900 million-a-year cap on the fast-growing film tax credit. Senate leaders backed away from that proposal after it passed Hufstetler’s committee near the end of the 2022 session.
The tax credit study panel is expected to make recommendations before the 2024 session begins in January.
State audit reviews that came out late last year raised new questions about whether Georgia is getting its money’s worth from some of the tax breaks that lobbyists helped push through the General Assembly with the promise that they’d create jobs.
The reviews found that in some cases, most of the jobs credited to the state tax breaks would have been created without the credits or exemptions.
In the Senate, some leaders say they’d like to use any savings to further reduce income taxes on Georgians.
But House Ways and Means Chairman Shaw Blackmon, a Bonaire Republican who is co-chairing the study panel, said lawmakers need to be careful not to eliminate incentives for businesses to create jobs.
Currently, such tax breaks often occur after supporters provide testimony or data from industry lobbyists or other parties that would benefit from them. Those advocates typically tell lawmakers the tax break will create or save jobs.
Many times in the past tax breaks passed in the final hours of a legislative session, when lawmakers take hundreds of votes and have little time to review what they are voting on.
Eliminating or even cutting back on tax breaks once they are approved is extremely difficult because lobbyists push to keep them by maintaining that they’ve created jobs or provided huge benefits to the state when they come up for renewal.
In fact, the last time the state studied its tax system, lawmakers in 2012 wound up making changes favored by industry lobbyists and creating new tax breaks.
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