Georgia Republicans are furious about a stipulation in President Biden’s coronavirus spending bill that bars states from using the funds to pay for tax cuts.
“Democrats in Washington and in the White House are not going to tell me, or the Georgia General Assembly, that we can’t cut taxes for hard-working Georgians,” Georgia Gov. Brian Kemp said during a Wednesday press conference.
The massive $1.9 trillion package includes relief for state and local governments that have seen a fall in revenue as a result of virus restrictions, with Georgia slated to receive $8.9 billion in funds.
The funds, however, also come with stipulations, including wording that prohibits states from using the funds to pay for tax breaks.
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Republican state House Speaker David Ralston said he is concerned that the federal bill could jeopardize legislation to raise the state’s standard deduction, a bipartisan proposal that would provide Georgia residents with a small tax break.
“This method of cutting taxes would benefit taxpayers who do not itemize and are generally of lower to middle incomes,” Ralston said. “In Georgia, we have prioritized providing tax relief to our citizens, and [the bill] appears to prohibit that relief.”
Ralston has urged Congress and Biden to rework the legislation to fix what he called a “flaw.”
But the Georgia Budget and Policy Institute said the tax breaks are small compared to what the state’s lawmakers could do with the funds, including passing an income tax credit that would see Georgia families pocket up to $500. By comparison, the rise in the standard deduction saves an individual taxpayer about $46 and a married couple roughly $63 per year.
“We understand and appreciate the desire to give relief to struggling Georgians by raising the standard deduction,” said Danny Kanso, a policy analyst with GBPI. “However, though the bill will allow Georgians to save up to $75 per year in taxes and make a much-needed upward adjustment to the state’s low standard deduction, more is needed to move the needle for working families.”
Meanwhile, Kemp has received pressure to restore budget cuts passed by the state last year, something he cautioned against during his Wednesday press conference.
“Given the unprecedented and unpredictable nature of a global pandemic, federal aid, tax refunds, unemployment payments, and a host of other issues that can potentially impact the state budget, there’s still a lot of uncertainty when it comes to state revenues through the end of this fiscal year and in the next,” Kemp told reporters at a Capitol press conference Wednesday.
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Biden’s coronavirus bill was approved Wednesday by the House of Representatives, and the president is expected to sign the legislation within hours of it hitting his desk.
