On Background:

Glenn Richardson - '08 Is The Year For Tax Reform, Or Next Chance Will Be Years Away

By Dick Pettys
InsiderAdvantage Georgia

(8/20/07) It’s not your average, every day occurrence, but every now and then something really big pops up at the Georgia statehouse that generally manages to eclipse everything in sight.

In the last 35 years or so I would include in that very short list Jimmy Carter’s governmental reorganization plan from the early 70s which shook state government to its roots.

I’d also include the no-fault insurance struggle from the same era which, for a time, fundamentally changed insurance practices.

I would add Joe Frank Harris’ immensely complicated Quality Basic Education Act in the mid-80s which changed the funding formula for schools and instituted middle schools across the state.

And, yes, I’d probably include Roy Barnes’ effort to change the flag, whether you were for it or agin’ it. (There very well could be a few others that deserve to make the list, but this isn’t intended to be an exhaustive compilation.)

With the exception of the Barnes flag change, which took the state by surprise and was slammed through the Legislature with stunning speed, the other initiatives took time to simmer and cook under the Gold Dome, most of them for two or more years. That gave proponents the time they needed to spread the word about what they wanted to do, to discover where the opposition was and try to work out a compromise or, alternatively, to marshal their forces to bulldoze through whatever roadblocks they anticipated

Heretofore, that’s how big, complicated issues were handled. And what, after all, could be more complicated than changing the education funding formula or deciding which agency gets to do what with whom?

Well, it turns out there’s one right around the corner: House Speaker Glenn Richardson’s tax reform proposal.

It’s nothing like the band-aid approaches that have been tried in Georgia before, from George Busbee’s $50 million giveback to property owners in the 70s to Barnes’ convoluted homeowners’ tax relief plan which he used to counter Republican Guy Millner’s “Ax The Tag Tax” campaign in 1998.

“The system’s fatally flawed,” says Richardson. “It’s inequitable, it’s unfair and it’s a product of a society that was in existence 100 years ago.”

His plan is complicated, it’s evolving and it’s definitely not being handled in the slow-motion fashion by which complex issues were resolved in the past.

Richardson, impatient and passionate about the proposal, isn’t burdened by a need to use the past as a guide, and believes it is now or never for the proposal.

“If it’s not (done this session) I don’t think we’ll have another chance to vote on this again any time soon, because I think something this big has to be brought up at this time,” he said in an interview late last week with InsiderAdvantage.

“I think that timing is everything in politics. This is ’08 (when the vote is taken). It’s the midyear of a second-term governor - the midpoint. If you try to bring it up in ’10, there’ll be gubernatorial elections going and it’ll get caught up in that. If you try to bring it up in ’12, there’ll be a new governor in place. If you try to bring it up in ’14, there’ll be another gubernatorial election,” he said.

“Society,” he said, “is about to leave us by. The opportunity and the great intrigue of this - as the nation is caught up talking about property taxes and states all over are trying to figure out how to twist and finagle - if we could do this in ’08, we’ll be ahead of everybody else and we’ll lead the nation, finally, in something ...”

The broad outline of the plan is to eliminate property taxes once and for all and use an enhanced sales tax to make up for the lost revenue.

That wasn’t necessarily the approach Richardson and House leaders were taking last November at the state House GOP caucus when they first mentioned the idea of developing a tax relief plan. At the time, their goal was to eliminate the income tax.

“We talked about it ... We asked: which tax makes the least amount of sense, which is the most inequitable, which is the most hated,” he said. Their conclusion: the property tax.

But the property tax, of course, is the primary source of funds for city and county governments and for local school systems. And predictably, government and school officials have raised a lot of questions, and there’s a lot of deep-rooted opposition out there.

Making this even more complicated is that the proposal continues to evolve, and no one yet knows what the final details will look like. Like everything else, the fighting will come over the fine print.

What we do know is that Richardson has been particularly visible on the stump this year promoting the plan at gatherings large and small across the state and visiting newsrooms. Behind the scenes, numbers are being crunched. Soon there will be full-blown hearings.

“We’re doing a lot of things. We’re trying to get the numbers to work. We’re trying to forecast short-term and long-term income. We’re trying to determine the criticisms of why it won’t work and answer those. And I feel pretty good that we’re getting a good hashing of it,” he said.

“I’m getting lots of criticism and the great thing is, we’ve announced that it’s a developing project with the underlying theory being to eliminate property taxes and to expand the base for sales taxes, and with that in mind, everything else is negotiable: how we do it, the formulas for doing it, what is or is not taxed at a certain rate, how the money gets doled back, what counties and cities can do with local objections.

“Yes, we’re accepting the criticisms. We’re accepting the suggestions and we’re making modifications,” he said.

But is one year just too short a period of time to develop a plan, sell it to key decision-makers and work the compromises necessary to steer it through the Legislature by two-thirds votes in both chambers?

Richardson said the time frame doesn’t worry him.

“I think we’re getting closer and closer. Every time somebody points me to a problem, I say, ‘Well, we can fix that. Why don’t you help me fashion a way to do that? How would you suggest we fix that particular issue?’ And they say, ‘Well, I haven’t thought about it.’ And I say, ‘Well, you come up with a problem; help me come up with a solution. But remember this: ‘We’re going to let the people of Georgia decide if they want to eliminate property taxes and pay as you go on sales taxes - a consumption tax to fund the most important thing we do in government. Education.”

Dick Pettys, editor of InsiderAdvantage Georgia, covered Georgia government and politics for The Associated Press for 35 years. He can be reached at 404 230 8930 or, by e-mail, at dpettys@insideradvantage.com.