While tax reform is expected to be a hot topic in the 2008 Georgia General Assembly session, local legislators and elected officials are urging caution.
State Sen. Preston Smith, R-Rome, said there already are a number of competing proposals floating around in both the House and the Senate.
“I have deep concerns because, if we make a significant shift, we’ve only got one chance to get it right,” Smith said, adding that he supports “tax cuts that are accompanied by spending cuts.”
The most widely discussed proposal is the GREAT Plan — Georgia’s Repeal of Every Ad valorem Tax — an initiative from House Speaker Glenn Richardson to replace some property taxes with expanded sales and service taxes.
Richardson is continuing to modify the plan, but state Rep. Barry Loudermilk, R-Cassville, said he’s still not sold on the concept. The plan lacks spending controls, he said, and appears to be a tax shift instead of a cut.
“You cannot have tax reform without budget reform,” Loudermilk said. “And you can’t create a new level of taxes without eliminating another or you will end up with both.”
The GREAT Plan is aimed at controlling property tax hikes to fund local government spending which, Richardson contends, has increased at a much faster rate than personal income or inflation.
Complaints from constituents are growing, said state Rep. Barbara Massey Reece, D-Menlo, especially in counties where — unlike Floyd — there is no freeze on property assessments.
“It’s a problem when people have to move out of their homes because they can’t pay their taxes,” she said. “There is a general feeling that assessments aren’t fair; that value is added when the government needs more money.”
Top officials in Rome and Floyd County said they support tax reform, but not at the loss of local control.
“I haven’t heard one citizen saying all of their tax money should flow to Atlanta and be dispensed back,” Rome Mayor Ronnie Wallace said during a joint services meeting last week.
County Commission Chairman Jerry Jennings said local leaders work hard to provide essential services in a cost-effective manner and are directly answerable to local residents.
“We don’t have frivolous spending,” he said. “And if the people don’t like what we’re doing, they can vote us out of office.”
Rome City Manager John Bennett produced a 10-year comparison of city budgets, showing the annual growth rarely exceeded the spending cap being proposed in a new Senate bill — and suggested county officials ready the same information.
“Our spending has not run amok,” he said. “Most years we can live within the (Consumer Price Index). But some years we just have to buy expensive equipment or pay for some state mandated activity.”
He urged county officials to prepare the same type of analysis to document their spending restraint.
Smith told officials the criticisms coming from legislators are aimed at local governments as a whole.
“I think, frankly, Floyd County does a better job than many places in the state, … but we’re hearing a lot of complaints,” he said.
Click here for competing proposals from the House and Senate.
Click here to view the GREAT Plan update from Dec. 07.
Click here to view Rome's 10-year spending analysis.
