PDF: Jobs bill PDF: Failed version JOBS bill* Gives employers tax credits for hiring previously unemployed individuals, pending approval from the tax commissioner* Cuts corporate net worth taxes by 25 percent, depending on reserve fund levels* Gives tax credit incentives to investors in businesses* Eliminates corporate net worth taxes in 2012
By Ashley Speagle
Correspondent
ATLANTA -- Georgia senators on Thursday passed a package of tax credits and reductions they said would create jobs and stimulate the economy, but which a legislative analyst called a "fiscally irresponsible" giveaway to the state's wealthiest.
The Senate voted 33-13 for the House version of the Jobs, Opportunity and Business Success Act. The bill includes tax credits for hiring people off unemployment rolls, eliminates corporate net worth taxes and would cut capital gains taxes by 25 percent when the state's reserve fund reaches $1 billion.
"This is the JOBS bill that passed out of this body last year," said Sen. Chip Rogers, R-Woodstock. He sponsored the bill after its creator, Rep. Tom Graves, R-Ranger, resigned to campaign for the 9th Congressional District.
Lt. Gov. Casey Cagle said in a statement called the bill "a true private-sector stimulus bill that will provide incentives for job creation and cut the capital gains tax in half."
But Alan Essig, executive director of the Georgia Budget and Policy Institute, estimated the bill will cost the state $380 million per year. He said using the reserve fund as a trigger for tax cuts will discourage officials from setting money aside in the fund.
"Connecting a large tax cut to reserve levels is fiscally irresponsible and will be a significant disincentive to growing reserves, potentially placing Georgia's AAA bond rating in jeopardy," Mr. Essig said.
The nonprofit institute says the top 20 percent of taxpayers, based on income, would receive 99 percent of the benefit in reduced capital gains taxes.
Senators rejected a substitute from the Senate Finance Committee that added a 1.45 percent hospital provider fee to help the state pay for Medicaid. Another bill specifically dealing with the provider fee was taken off Thursday's calendar for another day.
The bill approved Thursday passed the House last week. It echoed a bill by then-Rep. Graves that passed both houses last year but was vetoed by Gov. Sonny Perdue as too expensive.
The bill now goes to Gov. Perdue, who hasn't said whether he'll sign it into law.
Some provisions only will be effective if approved by the tax commissioner, which lawmakers said could make it more attractive for Gov. Perdue.
"It's a much, much lighter version," Sen. Rogers said.
Among other provisions, the bill creates an "angel" tax credit for investors in 2011-13 and eliminates corporate net worth taxes in 2012.
"It removes the nuisance, the corporate net worth tax, which may cost as much to collect as it brings in each year," Sen. Rogers said.
It also includes credits against unemployment insurance taxes for employers who hire jobless persons for at least 30 hours of work per week. Employers will get between $25 and $125 per new employee, depending on the tax commissioner's recommendations based on the state economy, labor market and reserve fund.
Ashley Speagle covers the Georgia Legislature. Contact her at speagle.ashley@gmail.com.