With Sound Clips

Perdue Rips House-Passed Tax Reform Measure As Irresponsible; Cagle Takes His Own Shots At Plan

By Dick Pettys
InsiderAdvantage Georgia

(3/14/08) The governor and the lieutenant governor threw a one-two punch Thursday at the tax relief plan that cleared the House this week on the last day for bills to cross between the chambers. The governor called it risky political pandering and the lieutenant governor declared it didn't provide the right kind of help at the right time.

House leaders responded by claiming the philosophical high ground within the Republican Party, and said the fight isn't about House-Senate politics or House-governor politics but whether the people will have the right to vote themselves a tax cut.

"I'm absolutely confident that Georgians are smart enough to determine whether or not they're deserving of a tax cut," said House Speaker Pro Tem Mark Burkhalter.

Gov. Sonny Perdue fired the first shot Thursday at the House-passed plan to eliminate the tag tax, calling it an irresponsible piece of pandering and likening it to the “Wright Brothers jumping off of Kitty Hawk and designing an airplane on the way down.”

(Click here for sound clip.)

Ninety minutes later, Lt. Gov. Casey Cagle took his own shot at the plan, saying in a statement it is too late and misses the mark. He said he's ready to work with the House on a tax incentive plan that will spur job-creation now. He didn't say what that was, but he did say it wouldn't be based on whether Georgians drive an "old Ford truck or a shiny new Porsche."

At a news conference an hour or so after that with Burkhalter and other House leaders, House Majority Leader Jerry Keen said: "We respect the governor, we admire the governor, he's been a strong fiscal steward in managing the matters of this state. But we just have a difference of opinion on this issue which, unfortunately, has carried over for two years now. We tried to get money back to the taxpayers. We think it's good for jobs, we think it's good for growth and expanding our state."

Weighing-in separately was House Rules Chairman Earl Ehrhart, who fired a salvo right back at critics of the tax plan. "They can talk about tax reform just like the Democrats and never do it, or they can do like Ronald Reagan and the Georgia House and actually do it. They're very Obama-like. Hear me roar, but don't look and see if I actually did anything."

The tax cut approved Tuesday would eliminate the car tag tax in two steps - half next year and the remainder in 2010. It would eliminate the state's quarter-mill property tax, and it would freeze property tax assessments at 2008 levels except for increases of up to 2 percent for residential property and 3 percent for commercial.

It is Speaker Glenn Richardson’s top priority of the session.

On Thursday, just before Perdue met with the press, a number of advocates for social services gathered outside the Capitol to warn reporters that the House tax measure, by 2011, could rip a huge hole in the budget - $773 million, the equivalent of the current PeachCare budget and one-third of the Medicaid budget.

Asked if he believe their concerns were valid, Perdue went off on a riff on the tax plan.

“I think that concern ... (is) legitimate. This is like creating for ourselves the situation I found when I came to office here - $600 or $700 million in the hole (and) trying to make those tough decisions. I found it rather interesting ... (that) the governing authorities in the House right now were not in the majority when I had to do that. People love to vote for tax cuts. It’s much tougher to balance a budget and talk about where those tax cuts come from.

“I think the people of Georgia get the joke. They want infrastructure, they want education, they want government to work for them. And I’m very concerned the level of these kind of things are irresponsible and I think, again, hastily put together. This is major tax policy of the state done on the fly in the Rules Committee on a supplemental calendar on the last day (for bills to cross the halls) ... I think people get the joke about that. I kind of liken it to the Wright Brothers jumping off of Kitty Hawk and designing an airplane on the way down.”

Perdue said the state will need resources “to fund education and growth and transportation of the future, and people understand that. Pandering to the political voter out here to go back and say, ‘We voted for a tax cut’ - I think more people than not get the joke about that.

Click here for sound clip two.

As for House leaders’ arguments that it provides an economic stimulus, Perdue said every argument offered on the floor was a federal argument. “People know the big difference. We are a balanced budget state and it falls my responsibility to offer a balanced budget on the front end ... The federal government can run huge deficits in that period of time (that a tax cut is in effect) and then allow the economy to catch up. We don’t have that luxury in this state. We cannot, nor do I plan on, running a deficit ...”

He also said the tax plan constituted a major tax policy “done on the fly in the Rules Committee on a supplemental calendar on the last day (to move bills from the House to the Senate.) I think people get the joke about that.”

The House-passed tax cut is a constitutional amendment. Should it win Senate passage, it would not need his approval and he could not veto it. It would go directly to the ballot.

Here's the text of Cagle's statement. He did not meet with reporters:

The House has passed a plan that needlessly delays tax relief for over a year, and doesn’t provide the full amount of relief for two years. Georgia workers are at risk of losing their jobs right now due to the economic downturn. Why are we waiting two years to cut taxes instead of having the courage to do it right now?

“I am interested in working with the House on a broad economic stimulus plan that will create jobs today. I believe we can develop a plan that cuts taxes for every Georgian, regardless of whether they drive an old Ford truck or a shiny new Porsche. The Senate also strongly believes in capping property tax assessments, and we have already passed two constitutional amendments doing exactly that. These are the issues that truly matter to Georgia families, and it is time to get serious about the business of creating jobs for Georgia by providing broad tax relief to all of our working citizens.”

At the House leadership news conference later in the afternoon, Burkhalter said:

"I think this is very simple. When taxpayers overpay to government and government has the sufficient money to fund all the critical needs of this state and be responsible, the government should not hoarde money and it should refund that money to the taxpayers. And I am absolutely confident that Georgians are smart enough to determine whether or not they're deserving of a tax cut."

Click here for that sound clip.

Said Keen:

"I think unfortunately we just have a philosophical difference of opinion with those who would disagree and maybe call this pandering. It's a core Republican philosophy and principle than when you lower the marginal tax rate or return tax dollars to the general public you can grow revenues in the future."

Ultimately, Keen said, "This is not about the House or the Senate or the governor. This is really about the people of Georgia having the ability to decide for themselves if they believe this is a responsible and timely tax cut, and we hope the Senate will join with us.

Click here for that sound clip.

He said the last major tax cut was in 1996 when the state began removing the sales tax from groceries. The estimated cost to the state was about $500 million out of a $10.6 billion budget, or about 5 percent of projected revenues. The latest proposed tax cut would be about half of that percentage, he said, "and I don't think anybody can say that Georgia hasn't grown revenues over the last 10 or 12 years or been able to provide services."

He added that Perdue, while a state senator, supported eliminating the grocery tax and, according to the Senate Journal, offered the motion to close debate and move on to the vote.