Senate panel will try to sift through the tax breaks

[private]Is Georgia handing out too many tax breaks that don’t offer the state a productive return on the money invested?

That’s the knotty question a Senate study committee will try to answer as it reviews the many tax breaks and exemptions passed by the Legislature over the past decade.

As the Special Tax Exemption Senate Study Committee kicked off the first of several hearings on Tuesday, the chairman, Sen. John Albers (R-Roswell), said the panel could very well recommend the expansion of some tax breaks, such as the highly lauded exemptions for the movie industry.Albers18jul2017

However, the committee will also look at “those that are actually not providing the value they were originally intended to,” Albers said.  “We want to look at those and see if it makes sense in the future to sunset those to make sure we’re spending each and every tax dollar as wisely as we can.”

As if that statement wasn’t chilling enough for the lobbyists crowded into the hearing room, Sen. Hunter Hill (R-Atlanta) later said:  “I’m more interested in lowering everyone’s taxes rather than have so many tax credits.”

Albers’ committee is poking around one of the largest sacred cows at the capitol — the special tax breaks that lawmakers pass and the governor signs every year that provide lucrative benefits for the business or industry receiving them.

A typical example from this year’s legislative session was the new law that provides a sales tax exemption to those who spend more than $500,000 to renovate a luxury yacht.

There has been a growing feeling among some legislators that perhaps the state is granting too many of these tax breaks, but they continue to pass them anyway.

“My experience has been that most folks are opposed to all of them, except for the one they’re for,” observed Sen. Jack Hill (R-Reidsville).

Albers said one of the study committee’s goals will be to develop a process for evaluating the fiscal worth of proposed tax breaks so that the unproductive ones aren’t passed in the first place.

That would be a first for Georgia, where tax breaks are generally enacted with no followup evaluation to determine whether they actually accomplished their purpose.

Chaaron Pearson of Pew Charitable Trusts, which studies the impact of tax breaks, told the committee that tax incentives for economic development purposes cost state and local governments $40 billion a year in foregone revenues.

Georgia is one of 23 states “that lacks a well-designed evaluation plan” for these tax breaks, Pearson said.

Albers said the study committee will hold several more hearings around the state:  Aug. 22 in North Georgia, Sept. 29 in the Savannah area, Oct. 27 in Southwest Georgia, and Nov. 14 in Atlanta.

© 2017 by The Georgia Report

Tags: John Albers , Senate study committee , tax breaks