Battle lines are being drawn in Georgia House Speaker Glenn Richardson’s plan to eliminate property taxes in favor of expanded sales and service taxes, but some of Floyd County’s state legislators are still on the fence.
“I like the concept, but the devil’s in the details,” said state Rep. Barry Loudermilk, R-Cassville.
Richardson, R-Hiram, is slowly releasing more specifics about how the GREAT Plan, Georgia’s Repeal of Every Ad valorum Tax, would work.
An expected 7 percent tax on services, from haircuts to doctor visits, taxes on business-to-business transactions and exemptions for farmers, Girl Scouts and manufacturers are some of the elements released this week.
“I’m not definitely for it or against it yet, although I think it’s critical we achieve tax reform in 2008,” said state Rep. Katie Dempsey, R-Rome. “How we get to that point, ... this is certainly part of that discussion.”
Local officials know where they stand — in opposition to a move they contend would put communities under the thumb of state politicos.
In a joint letter, the governments and school boards of Rome, Floyd County and Cave Spring urged legislators to reject the proposal when the Georgia General Assembly convenes in January.
The Rome City Commission also passed a resolution Monday that, among other things, calls sales tax an unreliable funding source and notes that Georgians would lose their tax deductions on state and federal returns. There also is some question if the sales and service taxes would cover the loss of property taxes.
Click here to view the Rome resolution opposing the tax plan.
“You’ve got a (budgetary) hole, you’ve got instability and you’ve got the fact that we have to go to Atlanta to get our money back,” Mayor Ronnie Wallace said.
Dempsey, a former Rome city commissioner, said she knows there are already issues with how sales tax collections are redistributed from the state.
Click here for a current list of sales tax exemptions.
“We’ve got to develop trust that we can return that money appropriately to the cities and counties,” she said. “But I am very troubled that property taxes have greatly surpassed the growth in personal income over the past 10 years.”
She and Loudermilk both said they are hearing positive comments about the plan from their constituents. Dempsey said taxing property instead of trade is “essentially a penalty for doing well.”
But Loudermilk said he wants to be sure the people are protected before he lends his support. A major issue for him is that the GREAT Plan does not include any spending cuts.
“If you don’t cut spending, it’s simply a tax shift instead of true reform,” he said.
“And, inevitably, citizens pay all taxes. Even when corporations pay, the cost is pushed down to the citizens.”
There are still many unanswered questions, he said, such as how much tax-collecting the average Georgia resident will have to do.
“I would not be in favor of person-to-person sales and service taxes,” he said.
“How would you monitor the tax collection for a yard sale?”
