A coalition is urging Georgia lawmakers to increase tobacco taxes, close loopholes for special interests, and eliminate tax breaks for itemizers to avoid proposed spending cuts.
“Georgia cannot cut its way to prosperity; that much has been made clear in the aftermath of the Great Recession and in the midst of this global pandemic. Deep cuts will disproportionately harm communities of color and rural communities and curb the state’s ability to recover,” the coalition said in a June 9 letter to Gov. Brian Kemp (R) and the General Assembly.
The letter comes as legislators resume this year’s legislative session, which was paused because of the coronavirus outbreak. Legislators must pass a fiscal 2021 budget that addresses a shortfall, which is estimated by Moody's Analytics to be between $3 billion and $3.8 billion for the rest of this fiscal year and fiscal 2021.
State departments and agencies were told to prepare for spending cuts of 14 percent in the fiscal 2021 budget as a result of the COVID-19 pandemic, according to a May 1 memo from House Appropriations Chair Terry England (R), Senate Appropriations Chair Blake Tillery (R), and Office of Planning and Budget Director Kelly Farr.
The coalition, whose members include the Georgia Budget and Policy Institute and the Georgia NAACP, said that level of cuts “would represent the deepest cuts Georgia has seen in modern history.” Noting that the state has options to raise revenue instead of cutting services, the coalition suggested “lifting the tobacco tax to the national average, closing special interest loopholes and removing Georgia’s 'double deduction' — an itemized tax break for paid state taxes that is only available to a fraction of Georgia filers who earn an average of $240,000 a year.”
“These solutions would allow Georgia to prioritize long-term recovery with investments in health, education, the safety net and other key programs and services,” the coalition said.
The Georgia Budget and Policy Institute has previously called for restricting transferability of tax credits and barring the use of credits from being deferred for over one year, limiting the annual value of Georgia's film tax credit to $100 million, and eliminating the $60 million rural health tax credit in favor of direct investment in healthcare.