GEORGIA HOUSE Speaker Glenn Richardson is nothing if not enthusiastic about a proposed massive overhaul of the states tax system. The Hiram Republican even used a recent appearance in Savannah with GOP presidential contender Rudy Giuliani to tout the plan, which would eliminate property taxes in favor of a flat-rate 5.75 percent income tax and a 5.75 percent state sales tax.
I believe we can put Georgia on the map, Richardson, one of the legislative sponsors of the proposed tax overhaul, said according to a recent Savannah Morning News story. It will be the biggest decision Georgia ever made, and the nation will follow. There is a rising call all over the country from people tired of property taxes.
Thats certainly some inspiring rhetoric.
Cut through the hyperbole, though, and its hard to avoid the impression that what Richardson is saying about tax reform has some loud echoes of that scary old canard, Im from the government, and Im here to help you.
Sure, people are tired of property taxes. But its also fair to say theyre tired of sales taxes and income taxes, too.
In that light, its important to note that its property taxes that are eliminated under Richardsons tax reform proposal, otherwise known as House Resolution 900. Its important because property taxes are a primary means by which local governments, including local public school systems, fund their operations. It is income and sales taxes that flow into state coffers.
At the same time it eliminates property taxes, House Resolution 900 would boost the state sales tax by almost two cents per dollar, and would remove exemptions from a number of items on which sales taxes currently are not paid. It would also set the income tax rate for all Georgia taxpayers close to the current 6 percent maximum rate.
Both adjustments would, clearly, tend to offset losses in property-tax revenue. But its not the revenue issue that is of primary importance here. Its true that Richardsons tax reform proposal would result in sweeping changes in the states tax structure, but those changes would come at the expense of local control over how taxes are raised and spent.
In place of that local control, House Resolution 900 includes provisions for a revenue guarantee to local governments and school systems. While the bill includes a complicated formula that would, presumably, provide for a fair calculation of that revenue guarantee, that calculation would apparently be done at the state level rather than locally.
Transforming the tax reform proposal into the actual law of the state is, thankfully, a burdensome process. It will require amending the state constitution, which means HR 900 will need the approval of two-thirds of both houses of the legislature, as well as the approval of a majority of voters in a statewide referendum.
Richardson said in Savannah that tax reform specifically, the elimination of property taxes will be his top legislative priority in the coming years legislative session. That should be sufficient notice to other lawmakers, and to the voters of Georgia, to start paying attention to the House speaker and HR 900