A few weeks ago we wrote about Tax Cut Fever in Georgia, and we have continued to monitor the high temperature of that debate since then. We are pleased to report, however, that cooler heads ultimately prevailed as the state's legislative session has ended without passage of either of the damaging tax-cut bills that had been under consideration.
Advocates in Georgia worked tirelessly to educate lawmakers and the public about the potentially damaging impact of two bills -- HB 238 to flatten and reduce the state's income tax (PDF) and SR 756 to amend the state Constitution (PDF) to force that rate down even further over time. ITEP analysis helped show that both were heavily skewed in favor of the wealthiest Georgians and would have weakened the state's ability to fund its K-12 schools, hospitals, roads, and other services. HB 238 alone would bled the state budget of $281 million to $442 million per year, more than half of which would have gone to the wealthiest 20 percent of Georgians.
One of the strongest words of warning came from former State Auditor Russell Hinton, who advised that slashing state revenues would pose a serious threat to Georgia's AAA bond rating. In the end, Georgians can be relieved that their representatives made the fiscally healthy decision to keep the state revenue system (and bond rating) intact.