Insider Interview: Glenn Richardson
GREAT Plan Will Be Phased-In, Starting
First With School and Auto Taxes
With Sound Clips
By Dick Pettys
InsiderAdvantage Georgia
(11/29/07 House Speaker Glenn Richardson offered the 10,000-foot
view Thursday of how his tax reform plan is shaping up, and said
he now believes for the first time that people are paying attention.
First, here is what is happening with the GREAT plan:
* It will be phased-in over
time, beginning with an effort to eliminate the school property
tax on homesteads and the car tag tax which all Georgians must pay
on their birthdays.
* To make up for the $2
billion in “lost” revenue, the sales tax would be broadened
to embrace services that are not now taxed. However, the broadened
tax would only apply to consumer services. There would be no new
taxes on business transactions because there would be no property
tax cut for businesses.
* Finally, cities and counties,
which would continue to have the power to levy property taxes, would
see new restrictions on their taxing and spending powers. Property
tax assessments could rise no more than 1 percent per year. Local
spending would be capped at the inflation rate plus 1 percent.
“To try and alleviate the concerns that many local governments
have about the viability of changing from the property tax to a
consumption tax, we’re going to propose to implement this
with a phased-in version to first provide relief to homeowners from
the school tax and relief to all Georgians by eliminating the personal
auto tax in the first year,” he said.
“When we have had a year or operations of that, if the money
is coming in in sufficient quantities, then we can look at doing
other things like eliminating all property taxes for all homesteads
(removing the city and county tax levy), or removing education taxes
for all properties (including business, commercial and rental property).”
He commented in an interview with InsiderAdvantage.
“The first option we are going to do. Step One will be to
give homeowners relief by eliminating the school tax and by eliminating
the tag tax on personal autos. The next phases we will have to discuss
...”
As to what services will be subject to the sales tax to offset
those changes, he said: “We’re starting off with a very
limited tax that would tax groceries, lottery tickets and consumer
services where the final end-user is the consumer, and we’ll
list every one of them.”
He said there will be no new business or manufacturing taxes, and
that current exemptions will remain in place.
The plan has been under intense criticism for months by local government
and school organizations, and has caused concern in some quarters
in the business sector.
But Richardson said he believes “the opposition is waning
a little bit, in light of the public opinion I see out there. Even
though counties and cities are adopting these resolutions ... against
it, citizens aren’t signing onto that. So I would say the
opposition has let up.”
As for the plan’s evolution, Richardson said this: “What
I proposed was a massive change to eliminate (property taxes) immediately.
And now then I say, ‘Okay, we’ll do it. But we can get
there in about three or four steps. And first is the most noticeable
is to ask homeowners if they would rather pay taxes as they go for
schools or not.”
Click
here for sound clip 1
Richardson said phase one probably would require two constitutional
amendments - one to set the assessment freeze and budget cap, and
the other relieving homeowners of the school property tax.
“They’d have to work in tandem. One without the other
is not any good,” he said.
“I think I’ve got people paying attention now for the
first time. I think people have been a little bit like frogs boiling
in the pot. And now then people are saying, ‘You know what?
He’s right. Our taxes are going up dramatically.”
Click
here for sound clip 2
Richardson and House Majority Leader Jerry Keen proposed eliminating
the school property tax several years ago while their party was
in the minority.
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