(The Center Square) – The Senate Special Committee on Eliminating Georgia’s Income Tax agreed not to consider increasing the state sales tax on groceries as a replacement for the reduction or elimination of the state income tax.
The tax was one of three that Chairman Blake Tillery, R-Vidalia, asked the committee to pledge not to consider at Wednesday’s meeting. Some committee members have raised concerns about possible higher grocery taxes.
The state takes in $16 billion annually in income taxes. Part of the committee’s task is to figure out how to replace the income tax revenue if eliminated.
The committee also agreed not to levy a grocery tax or raise the state’s motor fuel taxes. Tillery asked committee members to put their concerns about eliminating the sales tax in writing and send them to him.
“We have to get to a point in the next 90 days where we are limiting this to a proposal that we can vote on and eventually a bill that we can draft from that proposal,” Tillery said.
Another concern is how eliminating the state income tax would affect education. Tillery asked Sarah Hicks, former senior advisor and budget director to Texas Gov. Greg Abbott, if education was shortchanged because the state does not have an income tax.
“As part of Texas’ strategy to attract business, education has been a critical part of that,” Hicks said. “If it’s a priority, the legislature figures out how to fund it an education is one of those areas were it also reaps dividends. We have not seen a pulling away funding, higher or public education.”
Tillery asked Hicks if Georgia was fighting Texas for businesses with one arm behind its back because the Peach State has an income tax and Texas doesn’t.
“Yes,” Hicks said.
The committee listened to testimony from policy makers in neighboring states without a state income tax – Florida and Tennessee. The committee also heard from former Iowa state Rep. Tom Sands, who chaired the House Ways and Means Committee. Iowa has a flat income tax rate of 3.8%.
The committee’s next meeting will be sometime during the week of Oct.20 and will likely not be in Atlanta, Tillery said.
