Georgia lawmakers may eye more tax cuts

As officials eye more program cuts and possible furloughs for state employees, some Georgia lawmakers say they think they should look at cutting taxes again in 2010.

"The necessity for cutting taxes is greater now than it's ever been before," said state Rep. Martin Scott, R-Rossville, a member of the House Ways and Means Committee.

The state legislature earlier this year passed a package of legislation that would have reduced substantially the state's capital gains tax and given tax breaks to businesses that hire new employees. Gov. Sonny Perdue vetoed the package, calling it "unattainable," according to The Associated Press.

State Rep. Tom Graves, R-Ranger, the sponsor of the bill, could not be reached for comment.

Gov. Perdue did sign some tax-cut bills, however. One provides credits to businesses in "less developed areas," while another gives credits to homebuyers.

Ken Ellinger, a political science professor at Dalton State College, said more cuts could be up for discussion when the General Assembly convenes next year.

"There is a prominent philosophy among some Republicans that business-oriented tax cuts are an all-purpose cure for every economic slump," he said. "I suspect that at least some Republican lawmakers will propose some targeted tax cuts in hopes of stimulating business expansion and job creation."

Dr. Ellinger said those types of cuts have a "dubious track record."

State Rep. Roger Williams, R-Dalton, said he'd support further credits for employers, but he said he wasn't sure what the leadership's plans are for next year.

"I don't know right now whether there's any effort to go down that road or whether we'll just keep things as they are," he said.

Rep. Scott said he could think of several areas where taxes could be cut, including increasing the homestead exemption.

"Homeowners need relief," he said. The General Assembly this year did not grant the homestead exemption, citing the budget shortfall, but lawmakers said it will kick in again at any time state revenues grow 3 percent or more above inflation.

Rep. Scott said the state must maintain its vital services, such as education, public safety and roads, but there's no justification for tax increases.

But researchers such as the Georgia Budget and Policy Institute, a financial watchdog agency, have argued that new revenue sources are necessary.

"A balanced, responsible approach to managing this fiscal crisis includes targeted budget cuts but also additional revenues," a September report from the institute states.

Among the report's suggested revenue boosters are an increase in the cigarette tax, eliminating some tax breaks and loopholes, expansion of the sales tax base and temporarily adding a surcharge to the state income tax.