Organize the South

According to a local NPR report on PBA, Rep. Glenn Richardson is proposing to do away with income tax as well as property taxes. In previous posts, I've ranted about the stupid idea of getting rid of property taxes. It does away with local control and centralizes financial decisions in the legislature. Just as importantly, it leads to higher taxes since the sales tax has to be expanded. The taxes on the poor and working poor are particularly hard.

If the report is true, and Richardson is slowly losing his mind, Georgians have got to strike this stupidity. The Georgia Budget & Policy Institute has done some analysis on what's known so far. You can check out their website to find the schedule of forums for more information. You can also download fact sheets.

This is from the Athens Banner-Herald on Glenn Richardson's stupid idea to raise taxes in Georgia. They make a great point. The idea's premise is stupid, but it's just plain dangerous to let the legislature figure out the details.

Editorial: Lack of detail in 'Glenn Tax' should trouble all
http://www.onlineathens.com/stories/092807/opinion_20070928044.shtml

What could possibly be worse than Georgia House Speaker Glenn Richardson's not-so-great plan to eliminate property taxes in favor of an expanded state-administered sales tax?

Letting the entire Georgia General Assembly get its hands on the proposal, that's what.

Yet that's exactly what state Rep. Jerry Keen, R-St. Simons, the House majority leader, is proposing that the people of this state allow to happen. Speaking to Kiwanis and Rotary club members Wednesday in the south Georgia city of Cairo, Keen "said that lawmakers should be allowed to finish the plan during next year's legislative session before there is a rush to criticize it," according to a report in the Thomasville Times-Enterprise.

Also according to the Thomasville newspaper, Keen went on to say that a critical feature of the proposal - the formula by which the state would determine how much sales tax revenue would go to the various municipal and county governments and school boards across the state - remains undefined. Keen told the south Georgia Rotarians and Kiwanians that the formula - again, a critical component of the speaker's tax proposal - is "the last piece of the puzzle we're working on."

So, with a little more than three months remaining before the 2008 session of the Georgia General Assembly is gaveled into session - months that will, of course, be interrupted by major holidays - here's where we are with Richardson's tax proposal: No one can say how its proceeds will be distributed, and the people of Georgia are being asked to entrust that issue, and no telling how many other critical components of a massive overhaul of the state's tax system, to a group of people whose leadership includes the man who came up with the dubious scheme in the first place.

What all that means is that the speaker's tax proposal, which is not yet close to having even a minimum degree of clarity - as Keen admitted Wednesday in south Georgia - could morph into complete gibberish as it makes its way through the requisite committee hearings and other legislative horse-trading during the General Assembly session.

In other words, whatever Georgians might think the proposal is, and what it means for them, in advance of the legislative session, it's entirely possible - indeed, it's probable - that any final version approved by lawmakers will be something vastly different.

Consider, for instance, the fact that even Richardson himself has already proposed at least one modification to his sales tax proposal, telling an audience in LaGrange last month that he's considering exempting treatment for catastrophic medical conditions from the levy.

Clearly, Richardson's proposed exemption won't be the only one sought for the tax. There are likely any number of special-interest groups that write checks to legislator's campaigns, and any number of lobbyists who wine and dine the lawmakers, who'll be pushing for their own exemptions. Write enough exemptions into the proposal, and soon enough, any announced funding formula for local governments - if such a formula is, indeed, ever made public in any meaningful way - has to be changed, with little or no notice to the affected governments. And maybe that new formula means that no new teachers can be hired for the local high school, or that a needed fire engine can't be purchased, or that other urgent needs go unmet.

Of course, even if Richardson's proposal makes it through the legislature - as a proposed constitutional amendment, it would need an OK from two-thirds of the House and Senate - it would have to be approved by a majority of Georgia voters in a statewide referendum.

Yet, here again, just as in the run-up to the January start of the legislative session, a lack of detail could carry serious consequences. That's because ballots would have only the barest details regarding the proposal, likely asking voters to cast ballots on the overly broad question of whether the constitution should be amended to replace property taxes with a sales tax.

On its face, that's an appealing proposition. But, as with so much in life, the devil is in the details. Which should prompt Georgians to ask what the devil Richardson and other supporters of the tax proposal might be trying to hide as they move their admittedly unformed proposal through the legislative process.

This is from OnlineAthens, the website of the Athens Banner-Herald. Looks like local officials are getting mobilized. I fear though the deal they cut still won't be good for us who actually pay the taxes. Citizen involvement in this is going to be crucial.

Cities group opposes sales tax plan

Urges lobbying against objective

If city officials were the only ones allowed to vote on Georgia House Speaker Glenn Richardson's tax reform plan, it surely would go down in flames.

But state lawmakers, and then voters, will decide whether to go along with the Hiram Republican's proposal to replace property taxes with more sales taxes.

That's why the Georgia Municipal Association came to the Athens-Clarke Library Thursday: to urge mayors, managers, school board members and councilmen from more than a dozen cities to lobby against the plan.

"This is the single biggest attack I've ever seen or heard of on local government," Decatur Mayor and GMA Vice President Bill Floyd said.

The organization, which represents more than 500 municipal governments, contends that Richardson's proposal will cripple the ability of local government and school districts to raise or lower taxes to reflect the needs of different communities.

Almost all of the more than 50 officials from more than a dozen cities who attended the meeting agreed, tossing around words like "socialism," "communism," "bureaucracy" and "pseudo-Republicans" for an hour and a half. They focused mostly on how they would be unable to respond to citizens' concerns about tax rates or the quality of services like streets and schools.

"We're the only county in Georgia with three independent school systems," Commerce City Councilman Bob Sosebee said. "We know it's the most expensive and inefficient way to do it, but that's how we want to do it. That's how the voters in Commerce, Jefferson, Braselton and Jackson County want to do it."

Only Carnesville Mayor Harris Little disagreed with the consensus. Little said he and his constituents would support the change if Carnesville was guaranteed the same amount of money it's spending now.

"As long as they turn the water on and water comes out, and they flush the toilet and waste goes away, I'm not sure they care," he said.

Athens-Clarke Mayor Heidi Davison quickly countered Little, drawing applause for saying she won't be satisfied with providing only basic services. Athenians demand amenities like parks and a revamped Baxter Street from elected leaders, she said.

"I don't want my citizens reduced to a medium level of service because you don't want to pay your property taxes," Davison said.

Richardson's plan would eliminate property taxes and replace them with new sales taxes on services like haircuts and lawn mowing, along with groceries and other goods that now are exempt. The state would collect the taxes, then distribute them to cities, counties and school districts based on their 2006 budgets and population growth. It would require approval from two-thirds of state representatives and senators and a majority of voters.

With powerful politicians like Gov. Sonny Perdue and Lt. Gov. Casey Cagle also demanding tax reform, but raising questions about Richardson's plans, competing proposals could also be introduced to the General Assembly next year.

The AJC today is reporting that Gov Perdue and speaker Richardson sat down together. It wasn't a personal meeting, more of a Republican coffee klatch to talk about taxes. Perdue isn't endorsing Richardson's stupid idea to eliminate property, income and ad valoreum taxes. However, Perdue isn't saying he hates it either. Rather, in the political non-speak that is standard English for elected officials, he says he has strong doubts.

The governor wants another bad idea, to cut personal and corporate income taxes and to eliminate income taxes for some senior citizens. To be clear, he wants to give rich people and corporations a free ride. The senior citizen tax cut he proposed during his campaign applies to those making more than $120,000 per year. He gets credit for rejecting the property tax rebate, but not for silly pandering schemes.

At yesterday's Poor People's Day meeting, Peter Armstrong from the Georgia Budget & Policy Institute gave a short presentation on tax reform. Here's the deal. The Georgia budget is presently $20 billion. Richardson's proposal would cut the budget by $8 billion. Now, if the Georgia budget was $8 billion too big, this would be fine. But right now Georgia isn't doing near enough of what it needs to do (i.e. Grady, MARTA, water, my road, etc.). Richardson proposes a state sales tax to make up the difference. Trouble is sales taxes hit workers a lot harder than they do rich folk. Right off the bat, anyone not a CEO or rich lawyer is going to get smacked. Worse, Richardson will have to raise the sales tax. Armstrong estimates sales taxes would have to be raised by 5% to make up the difference. Richardson will also have to the exemptions. Now we're looking at paying taxes on EVERY transaction. Remember when Georgians paid taxes on groceries? There's a word for a situation like that: Alabama.

The GBPI will be having a January conference on poverty. Check out their website for future details. In the meantime, the next Poor People's Day meeting is September 27 at 9 Gammon Ave., Atlanta 30315. Lunch is at 12:30 and the meeting starts at 1pm. Call 404.622.7778 for more information.

Pity the poor Georgian. Not only do we have to put up with stupid ideas from Washington DC, we also have to deal with our own legislature. True, Texas has a good run on dumb ideas, but their legislature only meets every other year. We in Georgia have to deal with something stupid every year. Here's whats next.

Speaker of the house Glenn Richardson (R-Hiram) has an idea for tax reform. He wants to end property taxes outright and replace it with a sales tax. Income taxes stay. I pulled the summary from the AJC story from September 2 (No-property-taxes plan draws fire from local leaders). Here what would happen to Georgians under Richardson's plan. We:

• Would pay no property taxes on their homes, cars or businesses.
• Would continue paying an income tax.
• Would pay sales taxes on a wider range of goods and services, including all groceries, legal and accounting fees, haircuts and possibly some medical care.

In the last election Perdue proposed ending income taxes for rich retirees. The AJC also has a list of other proposals including a proposal by Sen. Mitch Seabaugh (R-Sharpsburg) and Rep. Steve Davis (R-McDonough) to eliminate state income taxes and raise sales taxes.

Tax reform is desperately needed in the state since working people bear the greatest burden. Corporations and the rich get off. However, adding to that burden is not a good idea. Eliminating the income tax (a progressive tax) and replacing it with a sales tax (a regressive tax) is a bad idea. Ending property taxes and centralizing all decision making in the legislature is a REALLY bad idea.

Find out more about tax reform at the Georgia Budget & Policy Institute reality check site. They are having a series of open meetings on tax reform. Check out the site for the latest info. This may become a big issue for Poor People's Day as well. People's Tax Reform is long overdue.