Georgia House Democrats today saved 82 percent of Georgia families from a tax increase during one of the worst economies the state has known in many generations.
HB 388, the third iteration of state tax overhaul, is essentially dead for the 2011 legislative session.
HB 388 offered a minimal personal income tax cut for the vast majority of Georgians, while increasing sales taxes on the same taxpayers, resulting in a net tax increase for 82 percent of all Georgians, under the fiscal model.
The process for development of this legislation violated, Democrats said, generally accepted practices of transparency and due consideration. Moreover, the proposed bill fails to immediately offer the only tax exemption that demonstrates even an indirect link to job growth - the energy exemption - and that would not taken effect until 2013.
"The overall impact of the legislation would have been to increase the state's budget deficit by an amount ranging from $132.3 million to $151 million for calendar year 2012, during a time of slow economic recovery. This proposal demonstrates fiscal irresponsibility, raises taxes on the majority of Georgians, and has no discernable impact on job creation," said Rep. Stacey Abrams, minority leader in the House of Representatives.
"State tax reform is not a bad idea but we cannot create a system of tax winners and losers, which is what HB 388 did. HB 388 created tax winners for upper income Georgians and made the middle class and working class tax losers," Abrams said.
Democratic Caucus Chairman Rep. Brian Thomas (D-Lilburn) said Democrats would like to take time in the coming months to create meaningful tax reform that works for all Georgians.
"Tax and pretend economics will not work for the GOP and it won't work for Georgians. Democrats want to do that through an open and fair process," said Thomas.
Rep. Carol Fullerton (D-Albany) said the efforts on HB 388 reflect a united Democratic House Caucus.
"Going into this legislative session our numbers were smaller; however, our spirit was not defeated. Georgia Democrats remain committed to the families of Georgia, particularly during these tough economic times," Fullerton.
Minority Whip Rep. Carolyn Hugley (D-Columbus) whose job it is to count votes, said there is a new mood among House Democrats.
"For far too long Democrats have been asked to absorb blame for every tax increase in the state. We are very happy to have had a platform to discuss what we truly believe in - fairness. It is easy to count votes when you do the right thing," Hugley said. "The GOP tax proposal would have raised taxes for taxpayers in all of Georgia's counties. We were happy to stand with Georgians against this this poor attempt at tax reform."
HB 388, through a statute passed in 2010, requires three readings in the Senate. Today was the final day to pass the bill from the House in order for the measure to have time to clear the Senate before Thursday, April 14, 2011, the final day of the session. ###