Tax breaks would total $471 million

[private]The various tax breaks and exemptions adopted by the General Assembly this year would total about $471 million over the next five years, if all of them were signed into law by Gov. Nathan Deal.

That collection of tax exemptions is a step up from the 2015 session, when the Legislature’s tax breaks had a collective revenue impact estimated at $176 million over the next five years and $271 million over the next eight years.

But it’s similar to the fiscal impact of the 2014 bundle of tax bills, which provided tax breaks that totaled nearly $500 million, according to the analysis of the Georgia Budget & Policy Institute (GBPI).

Tax breaks can be a controversial issue around the General Assembly and the one that generated some of the most heated discussions was in HB 951, which would provide a sales tax exemption for tickets to future Super Bowls and other major sporting events held in Atlanta.

That one drew fire from both the left and the right ends of the political spectrum.

“What this is really about is the greedy getting richer, the 1 percent getting richer,” said Sen. Vincent Fort (D-Atlanta). “This is like a jacking, this is a sort of car-jacking. . . . We don’t have to pander to, and be held hostage by, the Atlanta Falcons.”

“We’re talking about tickets — they average over about $1000 apiece,” said Michael Harden of the anti-tax group Americans for Prosperity. “So, we’re not talking about the waitress single mother or the 12-hour a day blue-collar gentleman that gets up every day at 4:30 to try to provide for his family.”

Supporters of the tax break said it was a requirement for Atlanta to be considered by the NFL as a future Super Bowl site.

“This is a business decision, and we want to attract business to the city of Atlanta and the state of Georgia,” Sen. Butch Miller (R-Gainesville) said.

GBPI uses fiscal notes prepared by the state auditor’s office as the basis for its analysis and provided this estimate of the tax legislation’s impact:

SB 258 provides a tax credit for charitable contributions made to financially distressed rural hospitals. The tax credits will total $180 million over a three-year period (2018-2020).

SB 379 renews a sales tax exemption for Goodwill Industries. Revenue impact: $2.5 million.

HB 763 extends sales tax exemptions for food banks. Revenue impact: $7 million.

HB 802 raises the deduction for Georgia Higher Education Savings Accounts. Revenue impact: $11.3 million.

HB 936 is a new income tax credit for employers to hire parolees. Revenue impact: $7.6 million.

HB 937 would extend a tax break for economic development projects of regional significance. Revenue impact: $63 million.

HB 951 would exempt the sale of Super Bowl tickets and tickets to other major sporting events from the state sales tax; it also extends the sales tax holiday for back-to-school shoppers. Revenue impact: $42 million for the sales tax holiday and $8.1 million for the Super Bowl ticket exemption.

HB 1014 extends the income tax credit for land conservation. Revenue impact: $150 million.

Two pieces of legislation that would have had a huge impact on state revenues failed because they passed the Senate but were never called up for a vote in the House.

HB 238 would have cut the state’s income tax rate from 6 percent to 5.4 percent. SR 756 would have put a permanent cap on the state budget by triggering automatic reductions in the income tax rate whenever revenue growth rose above specified levels.

“In the short-term, HB 238 and SR 756 if passed in tandem would’ve cut income taxes at an estimated five-year price of more than $2 billion in lost revenue,” GBPI analyst Wesley Tharpe said.

“Slashing income taxes and locking some of the cuts into the state’s constitution could also jeopardize Georgia’s AAA credit rating,” he added.

© 2016 by The Georgia Report


Tags: GBPI , revenue impact , tax breaks