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Georgia lawmakers could amend state’s tax credits

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(The Center Square) — Georgia officials could be poised to overhaul the state’s tax credits when they reconvene in January, lawmakers indicated during a Joint Tax Credit Review Panel meeting.

“Everybody has wants in the state – I always remember that – but it’s our job to make sure we do needs first,” state Rep. Chuck Martin, R-Alpharetta, said during the meeting. “There are people coming for appropriations; I know there are people coming from more tax credits because there happens to be money in the bank.

“If it’s not a good idea when there’s not money in the bank, it’s not a good idea when there is, and that’s what we all have to look at,” Martin added. “So if a tax credit is being scrutinized, if a tax exemption is being scrutinized, it doesn’t mean it wasn’t a good idea — from my standpoint — at the time it was put in to get something started. It’s not my job to take money from somebody that may need it for their kids to give it to somebody that wants to try something.”

Additionally, Sen. Chuck Hufstetler, R-Rome, said lawmakers could proceed with legislation that would increase transparency around tax credits.

“I think you’ll see some legislation, particularly around transparency, trying to make some of this information a little bit more available, and continue to ask the tough questions — and it’s nothing personal, those tough questions,” Hufstetler said.

According to the Georgia Budget and Policy Institute, the state’s budget “surplus” surpassed $16 billion at the end of fiscal 2023. Heading into 2024, state leaders have a “historic opportunity” to lower the state’s tax rate while remaining competitive nationally and among regional states, such as North Carolina, the head of another state group said.

“Georgia has been very prudent in its fiscal management,” Kyle Wingfield, the Georgia Public Policy Foundation’s president and CEO, told the Joint Tax Credit Review Panel. “It’s not been spending all the money that’s been coming in, but it’s been growing its spending a little bit faster than population and inflation so it’s hitting a balance in between the two.

“And we believe that with the current conditions and the surplus that this is a time — a really historic opportunity — to be bold and be a leader nationally in looking at moving the tax rate lower, remaining competitive with our neighboring states and other states we compete with around the country,” Wingfield added.

Wingfield pointed to Iowa’s Taxpayer Relief Fund, which officials use to set money aside to insure against revenue shortfalls, and North Carolina, where officials are broadening the state’s tax base.

“The state has taken a vital step toward creating a fairer tax system by convening this panel and implementing specific legislative provisions, like the one in 2021’s SB 6 that provided for the analyses of tax benefits,” GBPI President and CEO Staci Fox said in a statement. “While these measures are commendable, past evaluations of tax credits have run into resource and information limitations that hindered meaningful findings and the identification of actionable next steps.

“Overall, the current tax credit system is vulnerable and allows large out-of-state companies to exploit Georgia’s tax credits while sidelining small businesses,” Fox added. “The need for consistent, robust evaluations cannot be understated. Georgians deserve transparency in how their tax dollars are being spent. By implementing a comprehensive and regular evaluation process, the state can lay the foundation for transparency, accountability and equitable and responsible resource allocation.”

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