Columbus, Georgia

Georgia's First Consolidated Government

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

Council Members













For Immediate Release

March 19, 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:

www.gbpi.org





Senate Version of Tax Reform will De-Fund State Government





Education and Healthcare to Suffer







To view the following reports:



SR 20 ('TABOR') Fact Sheet: click here.



SR 20 ('TABOR') Flawed Formula: click here.



GBPI Analysis of SR 20: click here.









ATLANTA - The Lt. Governor unveiled his tax reform proposal today, with the

passage of the Senate version of HR 1246 and HB 1244 out of the Senate Finance

Committee. HB 1244 contains an income tax cut that would result in a $1.2

billion hole in the state budget in FY 2013. The TABOR-like cap on state

revenue growth contained in HR 1246 (previously contained in SR 20) would

ensure that revenues would be unable to grow to both pay for the tax cut and

meet the education and healthcare needs of Georgians.



"The combination of a $1.2 billion tax cut and limiting the growth of state

revenues would in practical terms de-fund state government," said Alan Essig,

the Executive Director of the Georgia Budget and Policy Institute. "This

irresponsible game of whose tax cut is bigger must stop. The General Assembly

needs to take the economic and budget realities of the state into

consideration."



Assuming a 6 percent cap in the growth of the state budget each year, $1.2

billion in 2013 is equivalent to:

100 percent of the PeachCare budget and 47 percent of the Medicaid budget; or

12 percent of K-12 education; or

42 percent of the Board of Regents budget; or

82 percent of the Department of Corrections budget.

Considering that revenues have already begun to slow as we enter into a

recession, the budget impact will be even greater. A cap on state revenue

growth will not allow Georgia to take advantage of increased revenues derived

from a future economic recovery, making it very difficult to raise the funds

necessary to pay for the tax cut without devastating vital government

services. In that 75 percent of the state budget pays for education,

healthcare, and criminal justice, it would be impossible to balance the state

budget without some combination of deep cuts to those services.



"The State Legislature needs to stop the political pandering and go back to

the drawing board in regards to tax reform," said Essig. "It is time for the

Governor to lead a process where comprehensive tax reform is studied in the

context of the development of a sound fiscal plan that accounts for the

education, healthcare, and public safety budget demands facing the state."



A copy of each GBPI analysis is available on GBPI's website, www.gbpi.org.





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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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