Rushed tax legislation in Georgia

The Georgia State Capitol building located in Atlanta, Ga

Georgia Gov. Nathan Deal has to be overjoyed with the tax bill approved in the General Assembly last week that now awaits his expected signature into law. The mixed bag of cuts and increases matches what he promised during his campaign and reiterated in his State of the State speech. Not everyone should share his joy, though. In their zeal to cut taxes, legislators created a bill that falls far short of useful reform and one that decidedly favors some constituencies over others.

The tax break bill rushed through the GOP-controlled General Assembly gives the appearance that taxpayers will save money. It also allows legislators seeking re-election to truthfully say that they voted to cut taxes. That’s a popular mantra these days, but one that often camouflages some uncomfortable truths.

Creates a deficit

The truth is that the tax package will create a $49 million revenue deficit next year, according to those who have read the bill. That’s just the initial cost. A nonpartisan estimate from Georgia State University suggests that the cost of the legislation over the next three fiscal years will be at least $200 million and perhaps far more — much of it to local governments that currently get funds from various levies that will be reduced or eliminated. The loss in revenue, of course, means that state and county officials will have to replace it — or cut their budgets.

Those who rushed to approve the package now on Deal’s desk don’t seem overly concerned about shortfalls. They say that the tax breaks it contains will attract new businesses and jobs to the state, and that it will put a bit more money in people’s pockets. That in turn should produce new spending that will replace lost revenue. Maybe. Maybe not. Truth is, that explanation sounds suspiciously like a variation on the now disproved trickle-down economic theory that inexplicably is still the darling of many conservative policymakers.

The new legislation will benefit some individuals and groups once it becomes law.