Debate Over Georgia Tax Plan

by Houston Chronicle

ATLANTA — House Speaker Glenn Richardson took the wraps off his proposal to erase Georgia's property tax at the state Capitol on Monday, and Gov. Sonny Perdue quickly used a high-profile speech to bash the plan.

Richardson provided his most detailed glimpse yet of his GREAT plan, which would eliminate property taxes in Georgia and replace them by applying the 4 percent sales tax on goods and services that are currently exempt. Richardson argues that sales taxes would need to fill a $4.6 billion hole in the budget left by the loss of property taxes. That's far less than the $9.7 billion in original estimates.

Richardson also released a list of items that would be exempt from the sales tax, including the sale of goods to hospitals and sale of farm machinery. Not available yet was a list of services that would be taxed under the plan.

Richardson unveiled the plan Monday morning in a closed-door meeting with Republican House members.

Perdue was less than impressed.
In a lunch-hour speech at the Atlanta Press Club, the governor warned against making dramatic changes to upset a state economy that is working.

"Georgia is not in a position, thankfully, where we have to gamble or take risks with our revenue stream," Perdue said.

He said the state's sales tax revenues have been volatile, while property taxes tend to be stable.

"I don't believe we want to rush in to treating Georgia's tax system with a cure that will need to be corrected or repealed a few months or a few years down the road," Perdue said.