ATLANTA — Senators overwhelmingly approved Friday a 10 percent cut to state income tax touted by Sen. Chip Rogers, R-Woodstock, as the “largest economic stimulus package” to come before the Legislature.
The Senate also approved — for the second time this session — the elimination of the state portion of property tax and limits on how much property value assessments can increase annually.
This sets the stage for Conference Committee negotiations with House leaders. The House wants to cut taxes by doing away with the property tax on vehicles.
The Senate’s income tax reduction would begin this year and when fully implemented in five years, would amount to a $1.2 billion tax cut each year.
“It helps everybody who works for a living,” said Sen. Don Thomas, R-Dalton. “It helps the state economy.”
Senate leaders boasted support from local government and tax reform organizations, especially after the Senate tied property assessment limits to inflation rates, instead of a fixed figure 2 percent for homes and 3 percent for nonresidential property, as in earlier versions.
“We believe this is the best tax relief option because the impact will be felt this year, and virtually every good economist confirms that a broad income tax cut represents the single best fiscal policy to stimulate the economy,” Lt. Governor Casey Cagle said in a statement. “The endorsements we received from tax reform groups validate this argument, and now we look forward to providing real tax relief to Georgians this year.”
Not all lawmakers or fiscal groups agreed, claiming it will leave a hole in the state budget and force cuts to vital services that Georgians simply can’t afford to provide for themselves despite the extra money from a tax cut.
“Each individual person can’t go buy a trauma center, or fund a mental health system,” said Sen. Nan Orrock, D-Atlanta. “You’re not saying, ‘Here’s what we’re going to cut.’”
House and Senate members said they agree on the almost $90 million a year cut in the state portion of the property tax and caps on property assessment value increases, but they will have to negotiate the “significant” tax cut before the end of the session, set for Friday.
ON THE NET
H.B. 1244 and H.R. 1246: www.legis.ga.gov
