By most accounts, Georgia sits in an enviable economic position.
As Georgia lawmakers march toward a return to the Gold Dome in January, they’re also looking at potential changes to the state’s tax structure and credits, including the much-ballyhooed film tax credit. Sen. Chuck Hufstetler, R-Rome, chair of the state Senate Finance Committee, recently spoke with The Center Square about what lawmakers might consider.
What should state lawmakers consider moving forward to ensure taxpayers see a good return on their investment? Might additional tax cuts be on the way?
Several years ago, we passed Senate Bill 6 that said [the chairs of the House and Senate finance committees could perform] an independent audit of different tax credits. We can pick five each year. We found out that some of these really don’t have a good return on investment for Georgia. So we, this year, are doing a special committee that’s going to be meeting through November to look at all the tax credits, particularly those that we’ve had studies on and say what we want to do but also look at our tax structure and see where we can make improvements. We’ve been able to cut the rate twice, but we know that we can do some more and Georgia’s in financially great shape right now. And we want to continue that and continue to lower the tax burden on Georgians.
There are headwinds economically, and a potential recession is looming. Does that give you some concern?
It does, and we want to be conservative in that, and I was actually hedging this year because of recession things we were thinking to happen, but Georgia seems to be continuing to perform so far. You need to have a rainy day fund balance for these tough times. And we built that up many, many times higher than it used to be. Recessions will come, and we’ve got to be prepared for it. But we also have to continue the growth of Georgia and continue to bring in revenue that makes the pie bigger, which means that we can then cut taxes again, as we have been able to do twice in the last four years.
Do some of the tax credits pick winners and losers? Or even just some of the incentives that the state gives out?
With some of those companies, it’s one thing to draw them here and get some incentives in place, but some of these others never change. And it’s the same thing year after year, and it really doesn’t make economic sense to do that. And so we’ve got to, obviously, look at what we do. The economic development people, obviously, are pro that, want to give away a lot, and other people have to look and say, ‘Let’s prove it.’ So it’s always a tough thing to do. But Georgia, when you look at the revenue, we’re doing something right because we’re still bringing in additional revenue from these companies that are making us have the ability to pay for other things to send back tax rebates, to send property tax rebates and also cut the tax rate.
By T.A. DeFeo | The Center Square contributor