Georgia Tax Reform BillPosted: April 10, 2012
“Sitting in a classroom is already hard for most children,” said Athens-Clarke County Teacher, Erin Michael, “it makes it even more difficult when there are roaches scurrying across the classroom floor.” Bug problems are among a few other funding issues Athens-Clarke County School District encounters on a daily basis.
Luckily for Ms. Michael and her students, a unanimously approved tax reform bill, passed on Mar. 22, provides a plan to help her and other Georgian’s. The bill proposes to change Georgia’s economy in a number of ways to benefit several categories of people and companies. Among the biggest changes is the way local governments fund schools and other services and bring jobs and investment opportunities to Georgia through tax incentives.
Georgia Governor Nathan Deal, who said he will sign the bill, believes the bill is “a pro-family, pro-jobs tax plan that will go a long way toward making Georgia the No.1 place in the nation to do business,” said Gov. Deal spokesman Brian Robinson. The bill cuts taxes for Georgia’s married couples, slowly repeals the property tax on motor vehicles and gives advantages to businesses.
The bill guarantees local governments $1 billion in revenue combined, rising two percent each year, and the governor-appointed state revenue commissioner has the power to change the distribution formula if it falls short. A portion of this revenue will be allocated towards local school systems.
“Every year I hear of new policies and programs that will supposedly increase funding, I really hope this one works, we need it,” said Ms. Michael. Athens needs funding for programs outside of normal school hours. “So many kids need tutoring, one-on-one instruction and mentoring which their parents can’t afford and a lot of teachers are doing as much as they can without being paid.”
One change proposed by the bill to provide local school systems with funding is the repeal on the property tax on motor vehicles and replaces it with a one-time title fee. This title fee will bring in an estimated $503 million over the next three years. State, city, local governments and school districts will split this revenue according to the distribution formula.
In addition to improving Athens’ schools funding problems, the bill also plans to improve local businesses. “Downtown Athens boutiques all felt the recession, although things have improved shoppers still need a push to spend as much as they used to,” said Private Gallery worker, Stephanie Goldstien. The bill proposes to aid local businesses through two tax changes. The first is a break on sales tax for shoppers, which will encourage a greater amount of purchasing power from consumers. The second tax change that could have the largest long-term impact is the requirement for retailers, like Amazon, to collect sales tax on merchandise they sell over the internet. This tax change encourages consumers to buy from local stores rather than online, which has taken a lot of business away local stores.
The changes to improve local businesses, like downtown Athens boutiques, resulting from the bill provide advantages throughout different sectors of business. The bill repeals taxes on manufacturers for the energy they buy. Georgia is the only southeastern state that charges a sales tax on energy. For example, the local transformer and solar panel manufacturer, Power Partners, spent $150,000 on energy sales tax last year alone. Now, the previously used tax money can be invested back into business and put Georgia businesses on equal footing with those in other states.
Regardless of the benefits promised by the tax reform bill, many Athens local officials are left questioning the realistic impact to the state and local governments. The big questions that are still left unanswered are: are the numbers right and can we trust future legislatures not to take that money if the state needs it. The bill passed through state legislature more quickly than expected. Athens-Clarke County Commissioner said there is uncertainty about the impact the bill will have on Athens as he has not received complete information regarding the bill yet.