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House Sends Tax Reform Bill to Senate on 155 – 9 Victory Lap

Mike Klein

The Georgia House overwhelmingly approved tax reform legislation Tuesday afternoon, sending the bill to the Senate on the wings of a powerful 155 – 9 bipartisan victory lap.  Speaker David Ralston closed debate with a rare appearance in the well, telling members to, “Vote Green!”

Ralston personally thanked A.D. Frazier, chairman of the 2010 Special Council on Tax Reform that traveled the state and took testimony from hundreds of Georgians before it submitted a far-reaching … and some would say, politically challenging … set of recommendations.

“Some of you who followed that Council know that even though he was one of my appointees, I really couldn’t do much with him!” Ralston told House members.  “He led what I believe is an effort that will continue to pay dividends in this state for many, many decades to come.”

House floor debate – scheduled to last three hours – was considerably shorter and entirely positive when it began in mid-afternoon.  Rep. Mickey Channell, chair of the special legislative committee on tax reform, began the debate by acknowledging “the completion of a fairly long journey” but he soon added, “HB 386 is not a comprehensive tax reform package.”

House Speaker David Ralston

Using phrases like “one more tool in that tool box” to attract new businesses, Channell and other speakers returned often to the impact on jobs.  He said eliminating sales taxes paid on energy used in manufacturing was a reason Caterpillar will locate a plant that employs 1,400 near Athens.   Channell said a sales tax exemption for projects of regional significance is an “important deal closer for our state” and “another matter that will help create jobs for the state.”

One by one other speakers including Minority Leader Stacey Abrams went to the well to support House Bill 386, which was immediately transmitted to the Senate.  The legislation combines new revenues and tax changes that Channell described as pro-business and pro-family.

On the taxes side, the annual ad valorem tax paid on vehicles would be gone, and sales tax paid on vehicle purchases would also be gone, both replaced by a one-time only title fee paid at the time of purchase, whether through a dealer or in so-called casual sales between individuals.

The marriage penalty that results in married couples paying more than single individuals would be gone under the legislation.  Tax-free retirement income would be capped at $65,000; it had been scheduled to increase annually but that will not happen.  Channell said even at the current cap, Georgia loses some $700 million per year in tax revenue.

A. D. Frazier, Chairman, Special Council on Tax Reform

Other tax changes include reinstating the sales tax holiday for school supplies for two years starting this fall,  elimination of a film production sales tax exemption because it did not work, new sales tax exemptions for agriculture, and a reduction in state sales tax charged on jet fuel sales.

The legislation also requires that all online retailers with Georgia customers must collect and remit sales tax.  The tax will not generate a great deal of revenue but supporters say it will create a more stable playing field for the state’s brick and mortar retailers.

Soon after the House voted, Georgia Chamber of Commerce President and CEO Chris Clark said the legislation would “attract new investment, encourage job creation, provide support to existing businesses and approve our overall competitiveness.”

Click here for coverage of Tuesday morning’s special committee on tax reform hearing.

(Mike Klein is Editor at the Georgia Public Policy Foundation)

March 20, 2012 Posted by | Uncategorized | , , , , , | Leave a comment

Speaker Ralston: State Prison Inmate Population Can Be Reduced 50%

Mike Klein

Georgia House Speaker David Ralston predicted significant criminal justice reform could reduce the state adult prison population by perhaps half and he said a resolution to HOPE scholarship funding might be near.  Ralston discussed two of the state’s most pressing financial challenges during a sold-out Atlanta Press Club luncheon on Thursday at The Commerce Club.

Ralston spoke about criminal justice reform one day after Governor Nathan Deal said a special council will make recommendations to reduce the $1 billion per year that Georgia now spends on adult corrections.  The Governor opened the door to serious consideration of mental health, DUI and drug courts along with day-reporting centers and mandatory sentencing changes.

Georgia currently incarcerates about 60,000 adults.  Governor Deal did not estimate how many non-violent offenders could be handled in other settings when he spoke Wednesday but one day later Ralston said, “I think with the right reforms we could reduce our prison population by half.  It’s long past due and I look forward to that conversation moving forward.”

The House Speaker also said, “We’re frankly locking a lot of people up who really don’t need to be in prison because they are more of a threat to themselves than they are to others.  It’s time now to have the courage to say we’re going in a new direction.  We’re going in a new direction.”

Speaker David Ralston

Ralston described the HOPE scholarship as a “victim of its own success” which was negatively impacted by more bright kids, tuition increases and Georgia Lottery revenue that flattened out.  Expenses already are greater than revenue and reserves could be exhausted next year.

HOPE was conceived to help place more students in higher education but Ralston said, “We added a lot of bells and whistles that weren’t there in 1992 and the bill has come due.”  Pre-K programs may be among those bells and whistles; they were not in the original legislation.

Ralston did not predict how HOPE would be saved or when a proposal would be ready.  “I think it’s going to be much, much sooner rather than later …We are very, very close to being able to announce a proposal that I think Georgians will recognize immediately is realistic and is fair.”

Mike Klein is Editor at the Georgia Public Policy Foundation.


February 17, 2011 Posted by | Uncategorized | , , , , | Leave a comment

Criminal Justice Reform Will Focus on Prison Alternatives, Less Spending

Mike Klein

Georgia will consider alternatives to incarceration of adult non-violent offenders in a sweeping criminal justice review announced Wednesday afternoon by Governor Nathan Deal.  Reforms could include expanded drug, DUI and mental health courts, changes to sentencing laws, and alternatives to technical parole violations.

The governor announced the review at a capitol news conference.  “Make no mistake.  While this effort should ultimately uncover strategies that will save taxpayer dollars, first and foremost we are attacking the human cost of a society with too much crime, too many people behind bars, too many children growing up without a much needed parent and too many wasted lives.”

Deal stood with an historic coalition of executive, judicial and legislative leaders that included Supreme Court Chief Justice Carol Hunstein.  “Our state can no longer afford to spend more than $1 billion a year to maintain the nation’s fourth highest incarceration rate,” Hunstein said.  “I am confident that with this united front that you see here today we will accomplish our goals.”

Legislation was introduced Wednesday to create a Special Council on Criminal Justice Reform and a legislative special committee that would review council recommendations next January. This model should sound familiar; it was created last year to consider tax policy reform.

Chilling statistics illustrate the challenge. Deal said nationally one-in-100 adults is behind state prison or local jail bars, 3.6% of American children have a parent who is behind bars, and the trend is growing worse.  Deal said one-in-77 adults was under correctional supervision during President Ronald Reagan’s first term; today the number is one-in-31 adults.

“In Georgia the numbers are even more troubling,” Deal said, citing one-in-13 Georgia adults in prison or jail, on probation or on parole.  Georgia ranks tenth nationally in total population but it has the fourth largest incarceration population.  The state prison population grew 4.6% during the past two years and 60,000 adults are behind bars.

“That growth has taken us to a place where our budgets no longer reflect our priorities,” Deal said.  The governor said Georgia spends $3,800 dollars per year for each public school student, $6,800 per year for each university system student and $18,000 per year for each prison inmate.   “That math simply does not work for Georgia,” Deal said.

Georgia joins southern states including Alabama, Arkansas, Mississippi, Louisiana and South Carolina that have undertaken reforms.  Texas shifted from incarceration for non-violent offenders to emphasis on community-based programs.  Texas committed $241 million to new and expanded programs, but it saved up to $500 million in immediate prison construction costs and hundreds of millions more in subsequent years.  Texas does not need new prison beds for at least four years.

Rep. Jay Neal introduced legislation to establish the Special Council and the legislative special committee.  “For decades we’ve been treating the symptoms of our addictive and mentally ill prisoners, the symptoms being their criminal behavior, rather than treating the root cause of those symptoms.  As a result, spending on corrections has skyrocketed.”  Neal said the corrections budget is the second fastest growing in state government behind Medicaid.

Deal said as many as three-fourths of all Georgia inmates have drug and / or alcohol addiction.  The question is whether to continue to incarcerate non-violent offenders or divert them away from the prison system and into special courts, day-reporting centers and community programs.

“We know that drug courts that are scattered throughout the state are successful,” Deal said. “We do know that DUI courts, of which we have a few, are being very well received and their results are tremendous.  We know that mental health courts, of which we have far too few, are also addressing a very important issue.”

House Speaker David Ralston cautioned against thinking Georgia has gone “somehow soft on crime.  Let me say that this is exercising sensible and responsible leadership.”  Lt.Gov. Casey Cagle spoke in favor of expanded sentencing options for prosecutors and judges.  He added, “In this debate let’s not forget the victims (and) their right to seek justice.”

Mike Klein is Editor at the Georgia Public Policy Foundation.

February 17, 2011 Posted by | Uncategorized | , , , , , , | Leave a comment