GBPI: Tax Cuts Mean Service Cuts

A new report released Monday shows proposed tax cuts would cost Georgia some 1.5 billion dollars over the next five years.

The report comes from the Georgia Budget and Policy Institute, an organization that looks at how state spending impacts government services. The group is concerned
about a pair of legislative bills that would give companies that hire out of work employees a 2400 dollar tax credit and cut the capital gains tax in half.

Conservative lawmakers who designed this plan say it would create at least two thousand jobs in the state. It's now on the Governor's desk waiting for his approval. GBPI's Allen Essig says the Governor needs to continue "being a responsible budget Governor. If he signs these bills, it will guarantee the state will have untennable deficits in the future."

Essig says that would mean a reduction in education, road and health care funding. Governor Sonny Perdue has not indicated what action he will take. The Governor's press office did not return calls for comment.

Economy slump could slash state worker raises

Raises for teachers and state employees are at risk as the slumping economy could have lawmakers reconsidering the state budget.

Drops in tax collections and a predicted budget shortfall of up to 2 billion don’t add up to the 700 million dollars in new spending approved last legislative session, said one think tank yesterday.

The Georgia Budget and Policy Institute recommends budgets cuts in non-vital areas, and if need be, putting the January 1st raises expected for state and Board of Regents employees on the chopping block.

The think tank's director Allen Essig said education programs and Medicaid and Peachcare should be kept safe. "It's really important we don't balance the budget on the backs of children and the elderly, those who can least afford it and that we spread the responsibility throughout the state."

Spreading responsibility includes a recommendation to raise cigarette taxes and rethinking special interest tax breaks.

A special session for lawmakers to retool the state budget could be on the horizon.