Columbus, Georgia

Georgia's First Consolidated Government

Post Office Box 1340
Columbus, Georgia, 31902-1340
(706) 653-4013
fax (706) 653-4016

Council Members

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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Tax Reform Resources





For More GBPI Reports:

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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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