After fumbling a comprehensive tax overhaul last year, legislators are trying to salvage bits and pieces of it at the risk of falling back into business as usual.
To succeed, that approach requires the Legislature to pass each piece to create new taxes and exemptions, shed unproductive exemptions and to cut income taxes. Those involved and critics say a significant overhaul will face a more difficult time in the face of pressure from Georgia residents and interest groups to shift the tax burden away from themselves.
"It's a shame. We had such a good window last year," said Alan Essig, the executive director of the Georgia Budget and Policy Institute, an Atlanta think tank.
"What happens piecemeal is easy stuff. Any tax cut is easy," he said. "The hard part is doing what liberals and conservatives say is good policy, broadening the base, taxing something that is not currently taxed."
A comprehensive overhaul was supposed to be revenue-neutral, meaning the tax burden on the average Georgian would remain about the same. But there was evidence that many Georgians would have paid higher taxes.
Broad new taxes gave almost everyone something to hate, said David Sjoquist, director of Georgia State University's Fiscal Research Center and one of 11 economists and businessmen who created the plan to overhaul taxes as members of the Special Council on Tax Reform and Fairness for Georgians.
"I said [at the time] one thing we have done successfully is tick off about everybody in the state but farmers and manufacturers," Sjoquist said.
Farmers and factory owners were happy because one proposal would erase taxes they pay on energy. But legislators said they quickly heard concerns from others. Political pressure, disagreement among legislators and incomplete information about the effects of the proposed changes forced the General Assembly to abandon the overhaul.
"It's very difficult to do something like this without leadership," Essig said. "Tax reform hasn't been led from the top. It has been picked apart from the bottom."
The energy tax exemption is one that Gov. Nathan Deal and legislative leaders from both parties continue to push. It is also an example of how pieces of the proposal can fall apart.
House Minority Leader Stacey Abrams, D-Atlanta, said Deal's ideas to make Georgia and it tax structure more business-competitive are sound. But the proposed energy tax cut, which could cost the state $170 million, has to be made up elsewhere in the governor's proposed $19.2 billion budget. There will be disagreements about how to do that, and Democrats are emphasizing a careful review of each cut and exemption proposed this year, Abrams said.
"We can't afford to do this by shifting the burden onto ordinary citizens," she said.
Local governments are concerned about the cut because they stand to lose an estimated $108 million in energy taxes that they also collect. Counties that would be hit particularly hard are those that rely on manufacturingfor their revenue, such as Murray County, where carpet makers account for $3 million of its $15 million annual budget.
"If it goes away, we are in bad shape," Murray County Commissioner Greg Hogan said.
The Association County Commissioners of Georgia is lobbying to continue the local energy tax collections, while key legislators want local governments to get on board with the cut.
Sen. Bill Heath, R-Bremen, a co-chairman of the Special Joint Committee on Georgia Revenue Structure, said the cut is key to bringing new businesses to Georgia, and those counties want the jobs that come with them.
"I think they will come around on that," Heath said, "and we will work with them to minimize the impacts of [the tax cut]."
Key legislators expect a number of ideas to be discussed and proposed, including taxes on person-to-person sales of cars and boats, telecommunications and electronic services, and Internet sales, as well as increases on the state's tobacco and sales taxes. Potential breaks include an exemption for raw materials and a cut in the state income tax.
Heath said it's difficult to find widespread support.
"You can certainly find some agreement on consumption taxes," he said. "But then folks debate what a consumption tax is. You mention groceries and some clam up. That seems to be a perfect consumption tax. Everybody eats."
A grocery tax faces wide opposition, including from Deal and Lt. Gov. Casey Cagle, because those who make less money would spend a larger share of their income on the taxes than the wealthy.
Because of the competing pressures when so many have an interest, a comprehensive tax overhaul is probably not doable, Heath said.
"I am afraid we are headed on a path ... of continued piecemeal tax reform," he said. "You can't call it reform when doing it piecemeal."