Georgia Budget and Policy Institute
For Immediate Release
April 14, 2008
Contact: Alan Essig, Executive Director
404-420-1324, Ext. 101
770-402-4630 (Cell)
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GBPI Analysis of
Fiscal Impact of Tax Bills
$165 Million in Corporate and
Special Interest Tax Cuts
Pass General Assembly
To view the following report:
Adding Up the Fiscal Notes, 2008: click here.
ATLANTA - The Georgia Budget and Policy Institute has released a new tax brief,
"Adding up the Fiscal Notes, 2008" that quantifies the fiscal impact of the
numerous tax bills passed by the Georgia General Assembly during the 2008
legislative session. If signed by the Governor, these bills will have a total
fiscal impact of as much as $165 million in FY 2009, $181 million in FY 2010,
and $160 million in FY 2011.
The major tax cut proposals - eliminating the car tag tax and cutting the
income tax rates - did not come up for a vote on the final day of session;
however, more than 20 smaller tax bills passed both Chambers. The $165 million
in tax cuts from these bills is not reflected in the Governor's FY 2009 revenue
estimate. In other words, if the Governor signs these bills into law, the FY
2009 budget will be out of balance. Although the Revenue Shortfall Reserve
contains $1.5 billion, it would be fiscally irresponsible to use reserve funds
to pay for tax cuts. Due to slow economic growth the Revenue Shortfall Reserve
will be needed to cover budget shortfalls in FY 2008 and FY 2009. The length
and breadth of the slowdown will determine the amount that will ultimately be
needed from the Revenue Shortfall Reserve.
"While the major tax cut proposals died, $165 million worth of special interest
tax breaks did pass," said Sarah Beth Gehl, Deputy Director of the Georgia
Budget and Policy Institute. "These tax cuts will continue the erosion of the
tax base, which means fewer people will be footing the bill or less dollars
will be going to education, healthcare, and public safety," said Gehl.
In that 75 percent of the budget is spent on education, healthcare, and
criminal justice it will be difficult to balance the budget without cutting
funding to those areas. The FY 2009 budget already contains a $90 million
austerity cut to education and does not include funds for the thousands of
low-income working families on waiting lists for child care services, the
thousands of disabled citizens on waiting lists for mental retardation and
developmental disabilities services, and the approximately 100,000 uninsured
children eligible but not receiving Medicaid.
"For the same amount of money expended on special interest tax breaks during
the past legislative session, the General Assembly could have more adequately
funded a statewide trauma network," said Alan Essig, Executive Director of the
Georgia Budget and Policy Institute. "Tax breaks will not help victims of auto
accidents in areas of the state without adequate medical services. Georgia
leaders must better prioritize tax and budget policy," said Essig.
A copy of each GBPI analysis is available on GBPI's website, www.gbpi.org.
Table 1: State Revenue Loss from Tax Legislation Passed by the House and Senate
FY 2009
FY 2010
FY 2011
HB 237 - Sales tax exemption for manufacturing machinery*
- $11.5 million
- $11.34 million
- $11.34 million
HB 272 - Sales tax exemption for energy used in manufacturing
negligible to - $8.7 million
negligible to - $12.5 million
negligible to - $8.2 million
HB 670 - Income tax credit for wood residuals and clean energy
- $2.5 million
- $2.5 million
- $2.5 million
HB 851 - Income tax credit for rehab of historic structure*
--
- $2.7 to - $10.0 million
- $2.7 to - $10.0 million
HB 926 - Internal Revenue Code alignment
- $22.0 million
- $22.0 million
- $1.0 million
HB 948 - Sales tax holiday
- $12.6 million
--
--
HB 957 - Sales tax exemption for Goodwill and Health Clinics
Under -$1.5mill
Under -$1.5mill
--
HB 977 - Tax incentives for High Deductible Health Plans
- $11.5 million
- $24.9 million
- $29.3 million
HB 1100 - Revisions to Film Tax Credit*
- $10.0 million
- $10.0 million
- $10.0 million
HB 1133 - Income tax credit for student scholarship org. donations
- $50.0 million
- $50.0 million
- $50.0 million
HB 1273 - Revisions to Jobs Tax Credit for Less Developed Areas
- $0.7 million
- $1.4 million
- $2.0 million
HB 1274 - Revisions to credits for donations of conservation land
Under -$1 mill.
- $1.0 million
- $2.0 million
HR 1276 - Forest Land Conservation Act*
- $34.0 million
- $34.0 million
- $34.0 million
TOTAL FISCAL IMPACT
-$155 to -$165 million
-$161 to -$181 million
-$145 to -$160 million
Source: Official fiscal note for bills. HR 1276 estimate taken from committee
testimony, as the resolution did not have a fiscal note. Does not include
bills lacking a fiscal note or bills extending the sunset dates for existing
tax exemptions.
*Fiscal note did not provide exact estimate for 2011, so 2010 estimate used.
The Georgia Budget and Policy Institute is the state's leading independent,
nonprofit, non-partisan organization engaged in research and education on the
fiscal and economic health of the state of Georgia. The Institute provides
reliable and timely analyses of Georgia's budget and tax policies and promotes
greater state government fiscal accountability, improved services and an
enhanced quality of life for all Georgians.
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