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Georgia Budget and Policy Institute
03/04/2008 02:57 PM
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News Release - Speaker's Tax Plan Will Lead to Devastating Budget Cuts
Georgia Budget and Policy Institute
For Immediate Release
March 4, 2008
Contact: Alan Essig, Executive Director
404-420-1324, Ext. 101
770-402-4630 (Cell)
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Passage of Speaker Richardson's Tax Plan Will Lead to Devastating Cuts to
Education, Healthcare, and Criminal Justice
Click here to view the Fact Sheet
ATLANTA - Speaker Richardson's latest tax reform proposals, SR 796 ad HB 979,
will lead to a $329 million hole in the FY 2010 budget and a $672 million hole
in the FY 2011 budget without providing any alternative funding source to fund
state programs, such as healthcare and education.
"It will be impossible to balance the state budget without deep cuts to
education, healthcare and criminal justice," said Alan Essig, the Executive
Director of the Georgia Budget and Policy Institute. "Such a major tax cut at
the same time as a slowing economy and revenue growth is perhaps the most
fiscally irresponsible policy proposal of the past 30 years."
A $672 million hole in the state budget is the equivalent of:
100 percent of the PeachCare budget and 27 percent of the Medicaid budget; or
8 percent of K-12 education; or
29 percent of the Board of Regents budget; or
56 percent of the Department of Corrections budget.
Considering that revenues are expected to slow due to the current economic
slowdown, the budget impact will be even greater. In that 75 percent of the
state budget pays for education, healthcare, and criminal justice, it will be
impossible to balance the state budget without some combination of deep cuts to
those services.
It is important to note that the last significant tax cut took place in the mid
1990's when the state sales tax on groceries was removed. This tax cut was
phased in over 4 years during Georgia's largest economic expansion since World
War II. Georgia is in a very different situation today.
"The General Assembly must act in a fiscally responsible manner and not in a
way that will harm the education of our children and put the health of our
children, elderly and disabled at risk," Essig concludes.
An analysis of both tax proposals is available on GBPI's website, www.gbpi.org
# # #
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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