State Senate seeks income tax cuts

Georgia Senate Republicans introduced yesterday a plan to cut state income taxes by 10 percent over five years. Lieutenant Governor Casey Cagle announced the proposal, which immediately caused a stir among House Republicans who have been pushing their own tax cut plan.

Last week, the House GOP passed a measure to eliminate the state’s car tax and the state portion of property taxes. The Senate plan, introduced in the final days of the legislative session, is expected to deepen tension between the two chambers and Governor Sonny Perdue, who has been skeptical of tax cuts during the current economic slowdown.

GOP lawmakers angry with Perdue over budget

State lawmakers are still mad that Gov. Sonny Perdue vetoed some of their favorite budget projects last month. Some want to call a special session to override his vetoes.

House members were already seething over Perdue's veto of a property tax cut. Then, the governor nixed some local projects, or pork, depending on your viewpoint. Senate Majority Leader Tommie Williams (R-Lyons) says even his chamber is upset with what came next: Perdue told state agencies to ignore lawmakers' instructions on how to spend public funds.

"If we don't have that privilege, then we become insignificant in the budget process and, frankly, we don't want to be there," he said.

Williams says he will try to work with Perdue to iron out differences soon. They have scheduled a meeting.

On the other hand, Clelia Davis, the spokeswoman for House leaders, says the lower chamber is seriously considering calling themselves back to the Capitol for a historic special session. Davis says representatives will not go out on a limb to do that without Senate backing, however.

A footnote:

When Gov. Sonny Perdue vetoed a property tax cut last month, he said the state could not afford it, and pointed to declining revenue numbers for April. But Georgia has bounced back stronger than before, with a 28 percent increase in May tax collections compared over last year.

Revenue Commissioner Bart Graham says the late tax deadline of April 17 caused a delay.

"The two days, and people who owed money filing on the deadline, contributed to a big swing between April and May," he said.

Graham says the department did not manipulate the numbers to bolster Perdue's case for a veto.

Governor and House Speaker agree to disagree on taxes for now

Gov. Sonny Perdue and House Speaker Glenn Richardson (R-Hiram) say they are still friends, despite exchanging harsh words over a property tax cut the House pitched and Perdue vetoed.

Nonetheless, both stuck to their guns at the GOP convention Saturday.

Perdue defended his veto. He said the $142 million saved is now in the state's reserve fund, where it can be used to reduce long-term expenses.

"I've not going to go through this job eight years and enjoy life," he said, "then hand a tax bill to my children for them and my grandchildren to pay."

Perdue noted the state needs billions to shore up its pension plan.

But when House Speaker Richardson took the stage an hour later, he insisted that a tax cut would have been the better choice.

"I say we need to go slow on saving money," he said. "If we've got extra money, we’re either taxing too much or we need to send some money back, period."

There may be a second part to what both men characterize as a "family feud."

Richardson announced plans to overhaul the state tax system.

"I'm going to lead an effort to repeal the property tax on every house, every piece of land, every car, truck, every real property," he said.

Ultimately, voters would have to approve a constitutional amendment that repeals property taxes and allows the state to depend solely on income and sales taxes for revenue.

But voters would get that opportunity only if Richardson's plan passed the legislature and won Perdue's approval.

That's a big "if."

"There never has been tax reform legislation without the executive branch being involved and, frankly, I would expect an integral part in that," Perdue says.

He told reporters he still hoped to fulfill his campaign pledge to extend the tax break on retirement income.

Richardson contends that tax cut would benefit only wealthy seniors.

On vetoes, overrides, tax cuts and egos at the State Capitol

Georgia lawmakers are stuck in a logjam over the midyear budget, but they're trying to reach a deal before going into a costly special session.

As of a few days ago, House Speaker Glenn Richardson (R-Hiram) was vowing to override Gov. Sonny Perdue's veto of the 2007 midyear budget "again and again and again" when lawmakers return to Atlanta.

But Lt. Gov. Casey Cagle dismissed Thursday the override as a "non-starter."

He says he’s conferred with both Richardson and Perdue. The feud, he says, is not really about policy.

"I wish you could take the politics out of the equation that we're in," Cagle says. "Unfortunately, that doesn’t exist. It's time for us to rise up and be statesmen."

When the governor vetoed the midyear budget, he singled out a $142 million property tax break. Although Cagle was one of the tax break's architects, he now says, "The deal that was presented that night was not the actual deal that has manifested. First it was a $100 check that was going to be given to every property owner in the state of Georgia and we were sure that due diligence had been done and, in effect, that has not transpired."

Local governments warned that it would be costly and difficult to send checks to homeowners, and that the value of each check would vary between $106 and $23, depending on the county.

Cagle now says he prefers Perdue's idea of expanding the existing retirees' tax cut. House leaders, however, say that would benefit only wealthy retirees. Nonetheless, the tax plan is expected to be on the table, along with the midyear budget, when lawmakers go into a special session.

In a written statement, House Majority Leader Jerry Keen says "The House fully supports and stands behind the $142 million tax refund to homeowners that we and the Senate unanimously voted for just 13 days ago. This is simply a policy dispute over what to do with excess revenue, and it is time to stand up for our conservative principles and do the fiscally conservative thing for Georgia. The House will not accept an '07 Amended Budget that does not include a tax break for Georgians."

Lawmakers expect the session to begin in a couple of weeks and last at least five days—at a cost of more than $240,000 dollars.

Tax cut for Georgia seniors

Governor Sonny Perdue’s tax cut for seniors is back on the legislative table. Late last week, the bill was one of several tacked onto House bills in the Senate. It's expected to come up for a vote in the Senate today.

Perdue’s proposal was thought to be dead, but lawmakers got the bill around rules that say it must pass at least one chamber at a certain point of the Assembly.

The bill to eliminate taxes for Georgia-retirees would benefit mostly those in the top-10 percent of income brackets. This is the scheduled final week of the 2007 legislative session.