Georgia Republicans may be offering an example to other legislatures of how not to proceed with major budget reforms. Last week in Atlanta, where the GOP holds both houses of the general assembly and the governor’s mansion, a plan to reform the state of Georgia’s tax code nearly fell apart as Democrats criticized the bill and Republicans fought among each other. The process is looking like something akin to the Democrats’ push to pass Obamacare last year, with frantic rewrites intended to secure the necessary votes.
Last year the general assembly created the Special Council on Tax Reform and Fairness, which recommended to the joint committee on tax reform in December a comprehensive plan that would lower the individual income tax from 6 percent, “flatten” the tax code by eliminating most itemized deductions, and ultimately shift the tax burden away from income through consumption taxes.
The Republican-controlled committee balked amid outcry from various interest groups, from service industries complaining about the consumption taxes to religious groups seeking to protect deductions for charitable donations. The result was a watered down proposal, with a smaller-than-desired income tax decrease that has angered some Tea Party groups and conservative Republicans in the assembly. Liberals and Democrats, too, went after the plan, saying it resulted in a tax increase on the middle class:
And those who make more than $180,000 would see significant tax cuts. For those with incomes of more than $500,000, the tax cuts would average 16 percent.
So Republicans spent last week furiously rewriting the bill, trying to assauge the various critics in order to assure enough votes for passage in both houses. According to Kyle Wingfield at the Atlanta Journal-Constitution, some of the alternatives to the original bill include one, reportedly supported by some house Republicans, that would practically maintain the status quo by lowering income taxes just one quarter of one percent.
A spokesman for the state house’s ways and means committee, Jeremy Betts, says the bill’s crafters are looking for a “happy medium” to address concerns about tax increases on middle class Georgians. Betts says he would guess the final bill will likely lower taxes for 90 percent of taxpayers.
There is a real possibility the bill won’t even pass in this session. The assembly is in recess this week and adjourns for the session next Thursday, so time is running out. The process is complicated by the fact that the state senate’s Republicans are in a power battle with the Republican lieutenant governor and even with each other about who is in charge.
Of course, Georgia governor Nathan Deal, elected last November as a tax-cutting conservative Republican, has been practically absent in the legislative debate. Shortly after taking office in January, Deal came out against the tax reform commission’s cigarette and grocery tax proposals and intimated that he did not believe 2011 was the year to push for tax reform, especially if that reform could raise taxes.
“We’re not going to sign anything that is a tax increase … in this climate, no matter how intentioned it is,” Deal told the Savannah Morning News in January. It’s unclear if he plans on signing the joint committee’s bill if it passes both houses. The governor’s office has yet to respond to a call and an email made earlier today.
If something does pass the general assembly by the end of next week, conservatives will likely be disappointed in a lighter version of tax reform that may or may not lessen the tax burden on the middle class. And if Deal remains true to his word, then a diluted tax reform bill with any actual tax increases will receive his veto. Either way, Democrats that have been out of any real power in Georgia for nearly a decade will have a bludgeon with which to strike at a state GOP that is prone to infighting.
