3rd UPDATE

Hardball Over Tax Cuts Under The Gold Dome

3rd Update at 6:53 p.m. adds Cagle ruling amendments on one bill not germanent, Senate stripping amendments off second bill. New material highlighted.
2nd Update at 5:23 p.m. adds Keen statement.
1st Update at 4:21 p.m. adds quotes from Cagle, Eric Johnson.

By Dick Pettys
InsiderAdvantage Georgia

(4/1/08) It’s no April Fools joke, but maybe it’s a little hardball - on both sides. Whatever, the tit-for-tat in the Georgia Legislature Tuesday clearly raised the stakes over tax relief under the Gold Dome. Before it was over, the Speaker had proposed a combination of tax cuts worth at least $1.5 billion and Lt. Gov. Casey Cagle had ruled a big part of the Speaker's effort non-germane.

It began Tuesday afernoon with Speaker Glenn Richardson denouncing the Senate for playing games over tax relief and then sending them an offer he said would show their good faith: a $1.5 billion tax cut that included not only his proposed elimination of the car tag tax in Georgia but Lt. Gov. Casey Cagle's proposal to cut income tax rates by 10 percent.

Toward that end, he got the House to send the two tax bills at play in this fight back to the Senate with amendments to accomplish his proposal.

“There can be no further games here," Richardson declared from the House well. "There can be no further amendments. “They can either vote to agree and accept this and it will go on the ballot, or they can disagree. If they disagree, they will have voted against giving Georgians tax reform.”

Cagle responded later by ruling the House amendments to Richardson's own bill not germane and by allowing the Senate to strip off the newly-added House amendments to the second bill. Both now return to the House.

He also issued this statement:

“With four days left, the General Assembly has a choice: the House and Senate can attack each other, or we can get serious about cutting taxes. It is my hope that the leadership of both chambers makes the choice to get serious about cutting taxes. The Senate will support a major tax cut, but we believe we should have the courage to cut state taxes instead of usurping the role of local officials. We also believe tax cuts should be accompanied by spending reductions, as Georgia’s Constitution clearly requires. We stand ready to consider any plan presented by the House to cut state spending and lower state taxes. I believe that if we work together in good faith there is still time to achieve that goal.”

House Majority Leader Jerry Keen, reacting to Cagle's statement, said:

“The argument that eliminating the car tax is somehow an attack on local government is the biggest cop-out of the session. Local governments will receive from the state every single dollar they currently receive in car tax revenue. The House has voted twice to eliminate the car tax and now once to lower income taxes. We are serious about cutting taxes for Georgians.”

Here is what House lawmakers did:

On HR 1246, Richardson’s original tax relief plan - from which the Senate had deleted the provision to ax the tag tax - the House amended the Senate bill to restore that tax cut but to limit it only to those who can prove they are legal residents. That reduces the price tag from $700 million to $500 million. The measure also will no longer include the governor’s proposal to eliminate the state’s quarter-mill property tax.

The measure is a constitutional amendment that would need voter ratification. It includes another provision which limits property reassessments to 2008 values except for increases of up to 2 percent for residential property and up to 3 percent for commercial property. Bot the Speaker's bill and the Senate bill included such a freeze, although the Senate version allowed slightly higher increases.

In the Senate, Cagle was asked by Finance Chairman Chip Rogers to rule whether the amendments were germane. He ruled they weren't and that was that.

On HB 1244, the House-passed bill which the Senate used for its proposal to cut income tax rates by 10 percent, the House moved the effective date forward from 2008 to 2011.

The Senate voted 39-10 to put the bill back the way it was when it passed the Senate.

“I ask you to join me in putting this squarely where it needs to be and let’s break this logjam and give the people of the state of Georgia much-needed tax reform,” he said.

The bills, as amended in the House, are linked. The income tax reduction would not take effect unless voters approve eliminating the tag tax.

At a news conference later, Speaker Pro Tem Mark Burkhalter said the new House proposal gives Republicans a chance to show their party believes in cutting taxes.

House Majority Leader Keen called it “a great compromise” and urged senators “to join us and give Georgians real tax relief.”

The step obviously is intended to jar something loose with time running out in the Legislature. At this point, the two sides seem deadlocked.