Town Hall meeting on the “GREAT” plan.

If the Speaker doesn’t like blogs, what he going to say about Town Hall meetings after comments like this?

“This plan makes us similar to the feds,” said Thor Johnson, president of the Lilburn Business Association. “What happened to the Republican, conservative approach of local control?”

And this?

Lilburn Mayor Jack Bolton opposed the plan that he said left too much power at the state level.

“The state should be giving us more options,” he said, “not just somebody down in the city of Atlanta deciding what we need.

“I’m very passionate that this is a bad bill,” Bolton continued after the meeting. “It takes power from those who live, work and play here.”

58 comments

  1. Rusty says:

    One of the biggest reasons the federal government is so corrupt is because of all the redistribution of income they’ve become (wrongfully) responsible for, and all the graft they take during that process. The GlennTax sounds to me like a way to make the state run lke a smaller version of the federal government. If you think there’s corruption now, wait ’til this turkey passes. Not such a GREAT idea unless you’re a legislator who likes pork.

  2. Rpolitic says:

    This editorial was in the Cherokee Tribune yesterday. Hope Rep. Ehrhart doesn’t mind.

    The GREAT Plan for Georgia

    Saturday, August 11, 2007 3:05 AM EDT

    The time has come to eliminate all property taxes in Georgia. If you have read this or any other newspaper in the last few weeks, you’re aware that the Georgia House of Representatives has proposed to do just that.

    House Resolution 900, known as the GREAT Plan, which stands for Georgia’s Repeal of Every Ad Valorem Tax, lays out a plan to eliminate all ad valorem taxes, commonly called property taxes, in favor of a sales, use, and service tax. This means Georgians would no longer pay property taxes on their land, boats, cars, and even homes.

    As we expected, many city, county, and school board officials vehemently oppose this plan.

    Georgia is divided into 159 counties, each with the power to tax their residents. 180 school districts and over 500 cities also each have the power to tax. But that power goes beyond simply collecting taxes. Rather than determining the amount of money they have and then creating a budget, as Georgia’s families do every day, a county can simply determine how much money they need first and then decide how much to charge their residents.

    If a county or school district decides they need $50 million, all they have to do is determine where to place the millage rate and their property values in order to raise $50 million. If times get tough, they simply raise the millage rate or increase property values through assessment, rather than tighten their belts like working families must do. The system is completely backward.

    A family can live in a home for 30 years and suddenly find they cannot afford it anymore because their property taxes have increased so much. They are not requiring any more services from their local government, and yet that government keeps taking more and more money from them.

    Under the current property tax system, you can never own your home. Even if your mortgage has been paid off, you receive a tax bill every year. The biggest asset most people have is their home; it’s the American dream. Yet if you can’t pay, you lose your home.

    The current property tax system was created when we were an agricultural society and people made a living off of their land. The last overhaul of the system was 70 years ago, and since that time our economy has changed significantly. Homeownership has increased from 30 percent to 70 percent. We have moved from an agricultural society to a service-based society, as has the rest of the nation, and yet, we do not tax services at all.

    It is now the 21st century. It is time to go to a system that taxes the receipt and exchange of money, not the ownership of property. It is time to eliminate property taxes.

    The GREAT Plan calls for a sales, use, and service tax of 4 percent. It does not propose that we raise the sales tax rate at all. It also calls for an elimination of many sales tax exemptions that special interests have accumulated over the years.

    There has been and will continue to be much angst and hand-wringing among local officials concerned about “local control.” Let’s consider the definition of “local control.” Is local control letting your local officials make all the decisions, including the decision to raise your taxes regardless of your ability to pay? Or, is local control handing over to you, the taxpayer, the right to decide when you pay taxes?

    Local counties, cities and school districts will be guaranteed in a statutory contract with the state to receive not less than the amount they are currently receiving from ad valorem taxes.

    If local control is what a community wants, they would continue local option sales taxes such as the SPLOST and ELOST (for education), all of which will continue to be determined by the vote of the citizens. Because the GREAT Plan expands the sales tax base, LOSTs will bring in more money than they currently do. And so, under HR 900, local governments would be able to use LOST revenue not just on capital improvements, but also on maintenance and operation.

    Local control is truly letting a vast majority of citizens decide when they pay taxes.

    We have opened a dialogue in this state on serious reform of taxes so that Georgia may lead the nation.

    Local officials need to heed the wishes of taxpayers and let them determine if they want property taxes at the ballot.

    Earl Ehrhart (R-Powder Springs) chairs the Rules Committee in the Georgia House of Representatives

  3. CHelf says:

    The part you have to love about the Federal level in this is that the Feds can always pressure states to do what THEY want in order to get money returned to the local level. The Federal government all the time pressures states to ‘comply’ with certain federal statutes or risk losing certain funds, etc. Is higher power blackmail addressed in this idea?

  4. IndyInjun says:

    Mr Ehrhart and the Speaker seem to be on different pages. HR900 called for a VAT, which effectively exempts business, but not the final consumer. (The lack of provision to exempt sales to a manufacturer or reseller in another state was laughable, among a host of laughable things.)

    It has been my understanding from reading what the Speaker has been saying that biz remains taxed, as it is now, under a SALES TAX, with services added to the tax base.

    Somewhere I read that the Speaker had written off HR900 after the idiocy that it represents was revealed.

    I seriously question whether either one of these guys even knows what he is talking about – a really scary thought when one considers their positions.

    The ramifications of imposing a VAT with no exemption for sale to an end manufacturer in another state or country AND the fact that sales tax reciprocity with other states vanishes with a VAT is plain downright LOONY.

    A part of me wants to see them pass this deal just for the entertainment value.

  5. eehrhart says:

    Tell you what Indy….I want to extend an open invitation to you to share with me your wisdom on taxation I would love to meet with you and talk about the plan which does away with the offensive property tax. I am serious and i will take all the time you want. I am interested in your ideas as you generally make good points. Other than when you are gratuitously telling me I dont know anything.

    On the subject of what the plan entails I am continually amazed at the hypocrisy of some locals.

    This local control argument is just foolish and irrelevant to the proposed statute. What we propose is to take away the property tax. lets deal with that fact at least.

    We also propose to by law, in statute, clearly give the local governments all the money they had in the base year plus more. WE ARE NOT TELLING THEM HOW TO SPEND IT!!

    If they want more all they have to do is ask the taxpayers. What a concept.

    A major irony here is that they act like tax revenue collected by the state and returned locally is some new and dangerous concept. One local the other day said: “comingling of funds” like it was some disgusting act. Of course his hand was out for all the other funds the state has comingled such as premium tax which is a straight statutory pass along to locals, as is certain DOT money, as is school money through the QBE formula and on and on and on. Funny how you never hear local control on that money.

    This is just a scare tactic to push peoples attention away from getting rid of property tax and it is disingenuous.

    If we as a general assembly were to suggest that the appropriative authority for this money resided with us they would have a case. We are not. They are making an absurd claim to scare people.

    Let me suggest an analogy. We could say that since locals have the power to tax then they are going to obviously tax everyone at 100%. They could try, but they would fail, just as any legislative attempt would fail to take away their local authority over the money we collect only for them under the plan.

    Case in point: There have been for years attempts to get rid of the premium tax on insurance and the locals have risen up each time and lobbied succesfully against it. The same would happen here.

    Indy I am serious about a discussion with you or any other and would like to make it happen. The Speaker is serioius when he says this is a work in progress. If all someone wants is the status quo on tax then there is no need to discuss, but a sincere effort to reform and anyone is at the table. We have to reform Georgias archaic system and this is the best opportunity ever.

  6. Icarus says:

    Rep Ehrhart,

    I’ll give you an example of how the state is already usurping local control under our current tax system. I think it should serve as an example, however, of how the problem will be magnified once all money has to pass through the state before it is returned to the counties.

    Developments in the metro area that are large and have a “regional impact” must be submitted to the ARC for review and approval.

    Coweta County just approved a large planned community that fell into this category. A condition of approval was that Peachtree City, Georgia build a four lane bridge across Line Creek to accommodate the traffic from this development. Peachtree City is in Fayette County, not Coweta, who approved this development.

    If Peachtree City taxpayers don’t build a bridge at their expense to accommodate a development in a neighboring county, then Peachtree City and Fayette County risk losing future state transportation funds.

    I appreciate the last paragraph of your post to Indy above, and hope this bill truly is a work in progress. As a conservative Republican, I can’t support it in its current structure.

  7. eehrhart says:

    Icarus,

    I would be the first to take issue with many of the ARC mandates and have many times.

    Again I would submit that we are only functioning as the repository for the money not the appropriative authority. By statute we are saying that must remain with the local area. If we ever tried to change that then again the argument could be made.

    It is a work in progress and HR 900 was just the vehicle to begin the study. It resembles nothing of the work being done today other than the reforms it suggests.

  8. IndyInjun says:

    eehrhart,

    Actually, when the subject of tax reform surfaced last year and envisioned eliminating the income tax, I suggested to my Rep. that the tax that the people would most like to eliminate was the Property tax. The House was responsive to that, which somewhat surprised me.

    Furthermore I am not opposed to a broadly based sales tax in lieu of property tax, as long as EVERYONE pays, as they now pay the existing sales tax, excepting the exemptions.

    As far as suggesting that you and Mr. Richardson do not know what you are talking about, I suppose I should be more lenient than to worry about what appear to most to be subtle distinctions between a VAT and a sales tax. Shoot, the PUBLIC cannot tell the difference in the FAIR?????tax and a FLAT tax, so I suppose you pols can be excused for not intending to confuse them further!

    I had an extended 45 minute conversation with my state senator, Bill Jackson, two weeks ago and told him I would be glad to go to Atlanta and meet with him and anyone else interested in my input. That certainly extends to you, Mr Richardson, or anyone else.

    There really are not that many people in or around accounting who concentrate in state and local taxation and even fewer who have done so in on a regional or national basis.

    Even the most cynical side of me does not see any of you intentionally passing something that would become an embarrassment.

    However, as noted on this topic and related ones, there are some very large holes in HR900 and conflicts that the legislators do not know about.

    The one thing that seriously has me puzzled is whether HR900 is the basis from which you are proceeding, as I had reviewed is when it was introduced at the end of the session and even started making moves toward public discussion of my findings. Then I read here and elsewhere the ideas that the Speaker was presenting across the state.

    My schedule has me pretty busy over the next few weeks, but I will get to you as soon as I can.

    Just let me know what is the current state of the proposal, otherwise I will go back to HR900 as the baseline.

  9. AubieTurtle says:

    That’s it, I refuse to accept any more psychological warfare! The “GREAT Plan”, the “Fair Tax”, etc are specifically named so that when people talk about them, it repeatedly implies that they have the positive effect that the name states. After a short while, people take it for granted that the plan must be great or that the tax is fair because, well, they’ve heard it over and over again.

    Even if I like the details of these plans, I resent the attack on my ability to have a reasonable and objective discussion about them without being required to use the disingenuous name. I guess I could resort something as annoying, like air quotes or add “the so called…” to the name of these plans but it’d take about a minute before those antics became the focus of the conversation instead of the issues at hand.

    You know what, I’ve come up with a new plan. It would require that everyone give 100% of their earnings to the government, which will turn around and give it to the Peachtree-Pine homeless center to distribute as they see fit. I call it “The Fairness Plan”. Sorry to Godwin the tread, but one has to ask if these guys were Nazis, would they have called the holocaust something like the Clean Streets Initiative?

    Geez… these legislators have very little respect for the intelligence of the general public they are suppose to represent. Call it the Tax Realignment Plan of 2008 or something similar and leave out the psychological warfare and all around douche baggery in naming the thing.

  10. Icarus says:

    Rep Ehrhart,

    I appreciate the dialogue.

    Of my many concerns, one is that even if the intentions are good on behalf of the current legislators, there is no guarantee that once the constitution is amended, future legislatures will honor these goals.

    During the Barnes administration, we saw GRTA passed, (which I believe gave the ARC its teeth to withhold state funds in the example I gave above.), regional control of water resources, and HB 1187 which took away a significant amount of control from local school boards.

    All of those major power grabs were during one four-year term. We saw our current governor make an early grab at eminent domain, only to be saved from himself by a few reluctant Senators.

    I agree that this is the best opening to get real tax reform in modern history. I’m very unconvinced when I hear the legislature say “trust me” when we bring up potential unintended consequences.

  11. dorian says:

    Kudos to Rep. Ehrhart for opening up at dialog with us common folks. Most representatives wouldn’t. On the other hand, I think that you people in Atlanta are awfully arrogant about this whole deal. Even your post sounded arrogant. This “we’re doing it for your own good and whether you like it or not” mentality just doesn’t sit well with me. However you want to couch it, you are taking control away from local governments, away from the people who I can, most likely influence, and giving it to yourselves. You will decide where the money goes. And how much goes where, and however the law starts, and whatever you promise us, that is exactly how it will end up. It always does.

    Mr. Erhart, tell us, what have you done to deserve this amount of power? You were all up there arguing like children for most of the legislative session. The first time the republicans have had a majority since reconstruction, and you humiliate yourselves, and now you want to control every level of government funding. Man, I’ll tell you what. I sure hope you folks are right, because if you are not, you will forever be known as the killers of small town america. Not that you have ever shown any interest in small town Georgia. Oh, yea, except for our new boat ramp. Thanks for that. You won’t fund our schools, but you build mighty fine boat ramps.

  12. Earl,

    Under your magnificent plan, what if a county like DeKalb wants to start offering foreign language instruction to all elementary students and it is not in the state’s spending? How do they go about doing that…with what money?

    Now they can advertise to taxpayers and potential taxpayers (people who might move from another county) that hey our taxes might be a little higher for schools but we do foreign language instruction for every student…or we have a top of the line magnet program, whatever. You pick. And someone can equally say screw foreign language, I’m moving to X county where they don’t waste money on that and my taxes will be lower.

    How will that happen now? Another thing of great concern to me is the new voucher bill. Right now people with special needs either move to a county that has a good program or send their kids to a private school that is equipped.

    Well, all things being equalled out by the state, no public school system will be able to compete with the private schools in a special needs arena (because no system can choose to distinguish themselves thusly). So all parents are just going to move to the lowest tax county and have the county/state pay for their child’s private school education. That county will be overburdened by having to reimburse private schools for educational expenses out of their school funds.

    Finally, Earl, you say that the property tax system is “archaic” because it is has more or less been in it’s current form for the last 70 years or so. Well guess what — so have sales taxes and income taxes! And according to this study:
    http://www.nahb.org/fileUpload_details.aspx?contentTypeID=3&contentID=76984&subContentID=105281 the amount of tax Georgia collects compared to property value is well below the national average and lower than all but 17 states.

    Every state has property taxes, and every state with better schools than Georgia collects much more in property taxes. What makes you so certain we should be heading in the other direction?

  13. Harry says:

    Aside from the philosophical objections about removing local control, I fear that the effect of removing property taxes will be to subsidize owners of substantial real estate, who would be likely to require more government services in the form of police and fire protection, public utilities, county engineering, etc.

    I’ve been saying a far more equitable tax reform solution would be to just lower the income tax rate. Of course, reducing income tax with no trade-offs would constitute actual tax reduction. I’m beginning to wonder if the purpose here is merely to have a shell game while claiming to be fiscal conservatives.

  14. eehrhart says:

    Dorian,

    If we are not right then it will be very simple for the people to repudiate the ballot measure.

    I am trusting of the brains and ability of the voting public. Are you?

    This plan is a referendum by consitutional amendment.

    Again I trust the people. Why do so many want to run from their verdict on property tax?

    The power under the plan remains local. Can you please show me in the plan we are laying out where it says that the legislature will direct the spending. I see it all the time and every discussion we have is that this remains by law with the local government.

    Harry,

    I would agree with you that the income tax should be reduced and this plan anticipates revenues great enough to begin such a reduction and the Speaker has mentioned that as the priority time after time.

    No matter who is in power there never seems to be the discipline to reduce spending. There is however one sure way to reduce it and that is to limit the money available to spend. Cut off the cash faucet.

    We are going to ask the people what they think and what they want to do. Again I trust that they will agree with us that the property tax is offensive and that the revenue generated from this system will drive the ability to cut the income tax also.

  15. eehrhart says:

    By the way Indy if you will contact me at my regular published email I will follow through with working with you and valuing whatever advice you have on tax reform.

  16. dorian says:

    The biggest problem that I see is that you all think you work for Glenn and not for us. You think that your committee appointment is more important than if you have a job. You really think a 2% tax on everything I buy and every service I use in a year versus my property tax payments is a deal? In what universe is that? I can already tell you I will buy more off the internet. Significantly more, so I guess I can look forward to filling in a ‘use’ tax return. What about the people who live in Augusta, by the way? What about all the revenue that will be lost from people shopping across the river? What about the devaluing of several hundred million dollars of general obligation bonds you just unsecured?

    Indy is super smart, and congrats to you for offering to listen to him. The thing is most of us are just normal, working class folks. The people you should be listening to, actually. So, yea, I agree. Let’s wait until November. It ought to be a real eye opener.

  17. Earl, thanks for not responding to my comment.

    You are technically correct but making a huge dishonest dodge when you say the localities can still spend the money. That’s *maybe* true, I doubt state Republicans will be that trusting.

    The whole point though is that now localities get to decide, by raising or lowering taxes both HOW MUCH MONEY they raise and how they spend it. You would decide for them how much they raise and then they could decide how they spend it (allegedly).

    But Earl, how can the state decide how much money a county needs to spend on education. You’ve voted for 6 budgets in a row now that don’t even disburse to the local school districts the QBE funds that state law currently requires.

    Through austerity cuts, the legislature and governor have essentially told the counties “we know better than you what money you need” even when state law, and not discretion, should dictate how much is given. Why should counties trust the state to give them the money they need even if they get to decide how to spend it once they may or may not get it.

    And how do you propose to do by formula at the state level what the counties already have a difficult time of doing on their own? I can’t think of two counties more different than Fulton and Fannin…so how does a formula account for those differences when it comes to raising tax revenue better than a locally elected school board?

    I hate to give you guys ideas, but wouldn’t state sales tax revenue available to counties to offset their local property taxes be a much better solution, a statewide version of the SPLOST and HOST that DeKalb has? Raise the sales tax statewide 1% and allocate the money to county school boards based on their enrollment then let the county school boards decide whether they want to use all of the money to offset property taxes or to increase spending by adding programs or raising teacher salaries or whatever.

    Having many choices are good, the Republican version of binary THIS or THAT, STATE or LOCAL, EARL or the HIGHWAY is not good! Thanks in advance for ignoring your critics who ask tough questions.

  18. CHelf says:

    So let me get this straight. The state takes out property taxes and essentially takes control of taxing from the local governments. If the governments feel they aren’t getting enough, they can raise higher taxes with ELOST’s and SPLOST’s. What is an anticipated tax rate if this went into effect?

  19. eehrhart says:

    The state does take out property taxes only with a vote by the public.

    If the local governments want more of your money they have to ask the taxpayers through referenda and not through unelected assesors.

    The anticipated rate when all of the special interest exceptions are eliminated is 4% the same as it is now.

    I can show you the empirical data and the numbers are accurate.

    They include no projections at all for what I and many others expect will be an economic development boom when we are the only state in the union without property tax.

    Yes it is a good idea and the people get to decide.

    If you like big tax vote against the referendum.

    The last poll we took showed over 80% public support for the idea.

  20. Icarus says:

    Rep Ehrhart,

    I’m unfortunately reading this statement:

    “If the local governments want more of your money they have to ask the taxpayers through referenda and not through unelected assesors”

    With the recent memory of this one:

    “The House position all along has been that we wanted to give money back to the people of Georgia, whether that be in the form of needed local projects such as economic development, natural resource preservation, or local infrastructure improvements. ”

    I remain unconvinced that Speaker Richardson isn’t using this tax reform plan as a grab at consolidating power in Atlanta, and more specifically, in the House, where all spending bills must originate.

    I believe you really do think you believe you’re on the right track. But after the public becomes educated about this proposal, I predict that if this bill somehow passes in its current form, it will be soundly rejected by the voters.

  21. dorian says:

    Can you refresh my memory, please? How exactly was the poll worded? Something to the effect “Do you want to eliminate all property tax in the state?” I could just as easily get a poll that says “Do you want to grind the middle class between the wheels of taxation and inflation?” and get an 80% no and say 80% of the people oppose it. Surely, in November it will have sufficient elaboration on the ballot. I mean surely. It’s such a great idea, there isn’t any reason not to, right?

  22. eehrhart says:

    Icarus,

    I can only speak from 20 years of association with the Speaker and can tell you he is as sincere as I am when it comes to limiting government and giving back the money to the people.

    If he wanted the power you are describing there would be no satutory guarantee in the proposed bill to pass all the money currently raised by locals plus some back to them.

    Could it be changed? Of course, but taxes could be levied at a 100 % level also.

    Neither are likely and neither are good policy.

    I would not support it without that.

    This really is not a new concept. The state is the repository for millions of tax dollars earmarked for local government already.

    Truly the home rule argument is just a scare tactic to divert the issue from finally getting rid of a rotten tax like property tax.

  23. eehrhart says:

    Dorian I trust the people to make the decision based upon language on the ballot.

    As for the poll questions wording I will be glad to supply it to you. email me and I will copy the question to you.

    I can paraphrase here:

    We purposefully set it up to see if we could get a negative so your cynicism is a little misplaced.

    It said in essence:

    Would you support the elimination of property tax and the raising of the sales tax by 1 to 1.75 cents per dollar?

    I beleive the overall result was 78%

    Hardly a push question when you add in the part about raising tax.

  24. Icarus says:

    I had access to a lot more polling data a few years ago than I do now, but I remember a lot of other polls that got an 80% response rate during HB 1187’s debate:

    Do you favor local control of your schools, or would you prefer education decisions to be made in Atlanta?

  25. eehrhart says:

    You could ask the question:

    Do you prefer the state to have no role in education decisions and to leave all funding and control to the local school board?

    Wonder how that would turn out?

  26. Inside_Man says:

    Something that might bear scrutiny are some of the future developments that a tax reform of this nature could make possible.

    One of those, which I first heard mentioned in 2005 when Rep. Keen made the first attempt to repeal the property tax, is that once the state has control of the totality of education funding, the county boards of education have lost their biggest tool to resist state level education reform.

    Right now, a task force appointed by the Governor is attempting to come up with a results-based cost of education. This is to establish the cost of teaching a child the three R’s or geometry or chemistry instead of say, the cost of sending a child to a given school for a year. Once this cost figure is fixed, the state can take that big ol’ pile of money and divide it by the FTE count to establish the per child funding rate.

    Having done this, you have overcome the single biggest obstacle to a statewide voucher scheme, namely proving the concept of a per child basic funding rate, provided equally to every child (plus some special needs increases, if applicable). This sum would be perfectly portable and the solid cash flow from year round sales tax receipts (perhaps an average of sales tax receipts from the past three years to be safe) would sustain a new model of true school choice for parents.

    And if you were really smart, you’d pass a special needs voucher program first, to accomplish a few key goals. Foremost would be proving the legality of vouchers in general in court with a nice test case. Second would be demonizing the opponents of vouchers by making them oppose special needs children by lobbying and in court. An added benefit might be some improved outcomes for those special needs kids that you could point to down the road to strengthen the argument for a statewide voucher program. “If vouchers can help our children most in need to learn better, in a better environment, why can’t they help all of Georgia’s children do the same?” I can hear it now. We passed a special needs voucher program last year.

  27. Roadkill says:

    The logic of general educational vouchers completely escapes me. The schools I am familiar with are full, with no extra space for refugees from “failing” schools. Imagine a really bad school with 100 percent of parents, vouchers in hand, looking for a really good school within a reasonable distance. Wouldn’t it be better to buck the teachers’ union (GAE) and work toward excellent schools all around, even if it meant firing poorly performing teachers and administrators? That would probably take more political courage than is evident, but one can dream.
    The voucher idea is nothing but a rather disinginuous effort to reimburse relatively well-off people who eschew public education to send their kids to private schools. Many of those now choose religious madras, which is OK with me as long as I don’t have to subsidise it! I think the result would be the distruction of public edication – and perhaps that’s the goal.

  28. Inside_Man says:

    It very well might be, I don’t know. I do think what I surmise as the plan, that which I described above, is an honest attempt to improve school choice, and thus improve the quality of the schools. The threat of closing down for lack of students is also supposed to be the stick that improves the quality of all schools. But ask yourself, if the state is funding all kids up to a basic level, wouldn’t it still be public education? The state can put whatever stipulations on the money that they want, kids are still going to have to be admitted to colleges, SACS will still accredit schools, the world isn’t going to stop turning if a voucher scheme gets passed. I’m all for public education, but why does the government have to do the actual educating? In any case, if that still is their plan, bravo, it’s brilliant and probably the only way to get a voucher scheme running.

    Now, for fear that we have hijacked the thread, back to taxes.

    I wonder how the legislature will deal with the charge that Metro will be footing the bill for education all over the state. Local dollars will not support the cost of education in a lot of counties. Most of that sales tax revenue is going to come from Fulton, DeKalb, Gwinnett, and Cobb counties.

    Also, I was remiss in the note above, Rep. Keen was looking at getting rid of the income tax in 2005, and replacing it with a combo of property and sales taxes.

  29. Bill Simon says:

    Note to the Dems,

    So, here’s the question I have: IF such a plan was ever proposed by your kind, would you be so skeptical as you are now?

    My guess is it would have been a damn love-fest had such a proposal come out of a Dem’s mouth. “Oooh, yeah! It’s the best plan! We Dems are SOOOOO smart! And we care about Georgian so much more than the GOP! YAY, Democrats!”

  30. Inside_Man says:

    Aubie,

    I fear the Orwellian monikers are here to stay. Orwell himself noted the rise of such disingenuous language as far back as 1946.

  31. Earl,

    You polled on 1.75% but your proposal is 4%.

    How about putting this question in your next poll. I will write it for you for free:

    Do you prefer:
    A) Letting local school boards raise and spend money for education by independently setting tax rates for sales and property taxes.

    or

    B) Have the state set one tax rate for all school districts using sales taxes.

  32. eehrhart says:

    “Raising the sales tax” 1 to 1.75 on the existing four.

    The word raising is the key.

    C. Taking the almost 80% of their budget which comes from the state and telling state taxpayers through their legislators not to bother being responsible stewards of the money, but to just send it to us and shut up about what we do with it.

  33. Icarus says:

    Again, Rep Ehrhart, its the phrasing that is causing you trouble here:

    “Taking the almost 80% of their budget which comes from the state”

    The money doesn’t come from the state. It comes from individual taxpayers. It is not a gift of charity that you guys are passing on to local governments. I know you feel the same way when you talk about unfunded federal mandates. I think you’re going to be very surprised when you see how many people that you normally agree with feel very strongly different on this issue.

  34. dorian says:

    Funny how that 80% of the people who polled favorably on this new tax scheme, none of them are here. Look, Rep. Ehrhart, with all humility and sincerity, I am extremely appreciative of you for taking the time to talk about this with us. I really think that, in and of itself, is a positive step. Good politicians can have bad idea, and coming from rural Georgia this is the worst, most dangerous, idea of my generation. I think you will find that, as more of the facts come out, and more people discuss this tax, just like we have done here, the so-called support you perceive for this tax scheme will evaporate.

    I trust my local commissioners, and my local school board alot more than you gentlemen under the gold dome. My vote counts for more with them than it does with my state rep, and significantly more than with my senator. Moreover, most of my neighbors are people I know who are similarly situated as I am. All this is to say I have more direct representation. Those statements of yours about school boards running amok just doesn’t fly. My school board is much more accountable to me than you are, or for that matter, my representative.

    I am not defending property taxes. Not at all, but while I do not like them, I believe in small government and local control more than I believe you guys deserve to consolidate power. As this discussion has indicated, it is an opinion that many share, and one that you cannot casually brush away. You guys don’t ever give power back. You just take it. I don’t intend that as a specific criticism toward you specifically, or the state government collectively. It is just the nature of governments, and it is something that, fundamentally and absolutely, is worth fighting against.

  35. eehrhart says:

    Icarus yes it does come from individual taxpayers. My comment was in the context of how the money is currently distributed. I was attempting irony as that money is already comingled and you do not hear the screams of local control with respect to that. You just hear give us more. We do have a responsibility to be stewards of the money or why are we there?

    Well Dorian I guess I just have a different perspective of the 80 % of Georgians who have expressed concerns with property tax. I just fail to find them without the capacity to make such a decision.

    When they are presented with the facts and not the concerns of those who like big taxes and more taxes, then I trust the people to make a sound judgement. I am not suggesting that you are a tax and spend individual either. Many local governments are out of control on tax though.

    Oh and by the way where did I say “running amok” I think school boards by and large do a great job for the record. I just dont like property taxes as they are offensive and wrong.

    Just a question to pose. How many local governments are in the process of limiting themselves and doing away with or cutting taxes?

    I would suggest that state government is leading the way on this.
    Please dont talk about those who claim millage reductions while the property tax assesments are going through the roof as a tax cut. This is truly the con of the century and if the state government did such we would be vilified worse than today.

  36. Harry says:

    Maybe the argument against loss of local control could be addressed by earmarking back to each school district the additional (1.75%) sales tax collections in the district. Eliminating property taxes would certainly remove a lot of assessment, billing and collection bureaucracy that goes on in each county, and would put the tax administration burden mainly on the already existing sales tax “agents” – ie the businesses that already have to collect and remit, plus lawyers, and accountants like me! If it removes property taxes as well as a whole layer of bureaucracy, then maybe Glenn and Earl need to keep pushing. It would be interesting to be the only state in the union without property tax. A sales tax has the added benefit of discouraging consumption while encouraging saving and investment.

  37. Harry says:

    To further elaborate on the local control issue…if the additional local tax collections were treated like a local SPLOST etc, and the funds automatically handed over to the counties and school boards, then the loss of local control issue is taken off the table.

  38. Icarus says:

    O.K.,

    I’m going to take a step back here and ask what are the goals of this tax reform? I’m guessing it can be more than one answer.

    1. Eliminate the property tax, because it is unfair.

    2. Cut taxes

    3. Provide equal services (i.e. education spending) among unequal districts.

    4. Maintain current spending levels under a more fair or simple system.

    5. Consolidation of power at the state level.

    6. Boost economic development.

    7. Give money back to the people.

    I seriously don’t mean this as a snark or a rhetorical question. I think it would be a lot easier for me to either express my skepticism or figure out why I should be supporting this (trying to keep an open mind, but will admit that my support is still doubtful – will try though) if I understand what the goals are other than to say we had tax “reform”.

    So, in short, (too late), what do we hope to accomplish with this reform?

  39. Icarus says:

    Harry,

    If I’m not mistaken, counties are currently limited to a 1% sales tax for general purposes. An additional 1% is allowed for either schools and/or transportation, for specific projects. The law (constitution?) would have to be changed to allow local governments to increase taxes for “general purposes” above 1%, which almost all counties already charge.

  40. dorian says:

    Icarus, I think several of your premises are off. One, how is the property tax system unfair? To whom is it unfair? That is a conclusion that has been shoved down our throat with very little premise for it. You think about what your property taxes are for a year. and then think about what a 2% tax on everything you buy and every service you use for a year. How is that a deal? Isn’t it generally low income people who don’t own property? Is the unfair part that we want to tax them more? But, if that is the case then why have low income exceptions, and if we have low income exceptions, then why have this new tax scheme at all? Maybe, we can also discuss how we will be saving money with this new .30/gal gas tax while we are at it. If these ‘republicans’ have their way, the only way you will save money is by riding a bike and shopping online.

  41. IndyInjun says:

    Harry:

    You are right. Can you imagine the business we will do if ALL state and local revenues are wound up in a SALES TAX AND AN INCOME TAX?

    The Georgia DOR will quite naturally expand, as the Georgia sales tax expands to services and becomes the preeminent source of revenue. Their audits will grow in scope, intrusiveness, and in number. They will use their broad powers to do use tax audits on individuals.

    Service businesses that only filed and paid property taxes once a year, will find themselves having to file their new sales taxes monthly. They will have to make prepayments of estimated sales taxes as goods retailers must now.

    We will find the loopholes that accentuate our value to clients.

    Imagine how busy and lucrative it will be when the federal “Fair”????? tax is passed, with its blanket exemption of business and it causes myriad conflicts with the GREAT plan.

    Imagine the heat that will come down when revenues run short and the counties questioon whether DOR is failing to account for, and disburse the funds accurately, as happened in the 90’s. At some point the locals will insist upon rights to audit DOR.

    Seriously, the RIGHT TO AUDIT DOR on the part of the counties should be an ironclad precondition for moving to a broader and GREATer sales tax.

    As it stands, the accuracy and dependablity of sales tax collections RIGHT NOW is not all that great. For example, I went to a home improvement store in the city and bought several thosand $ of goods to be delivered to a rural county. The retailer’s system had no code for the county of delivery and allocated the sales tax to Richmond County.

    A client of mine had not one, BUT TWO MANUFACTURING PLANTS allocating sales tax distributions to the county in which the nearest large city was located, NOT the counties in which the plants were sited.

    Of course, by allocating upon a point of time and on a revenue guarantee based upon the previous bad allocations guarantees future misallocations.

    I suppose that this discussion will produce at least the positives of exposing ways in which the existing systems can be improved.

    I had largely retired from tax accounting endeavors, but I see a lot of room for a second career as a tax reformer.

    Actually it might be worth it to be rid of the awful property tax, which is riddled with corrupting exemptions that are causing a near revolt among homeowners.

    If not, perhaps these discussions will result in reforms of BOTH sales and property tax. Both systems are loaded with too many exemptions and quirky inconsistencies.

    I applaud the discussion, like the idea in general, but have doubts as to details.

    Grand attempts toward change have merit, even when they fail.

  42. Icarus says:

    Dorian,

    chill,

    Not MY premises.

    I’m asking what are the premises being used to promote this plan. Once I know what they are, It will make it easier to have an “apples to apples” discussion.

  43. Icarus says:

    How the hell did Indy and I get on the same page on this?

    I feel like I just fell down a rabbit hole and I’m talking to Alice and the Mad Hatter…

    Welcome back Indy, please continue to treat Rep. Ehrhart with respect. At least he’s willing to ask the right questions.

  44. IndyInjun says:

    Mr. Erhart:

    One problem, as I see it, with selecting a designated point in time to establish the allocation formula for the local revenue guarantee, is that there are pretty dramatic swings between different months of the year. During December, the share of sales taxes collected in counties with retail establishments is much greater than in the summer, so wouldn’t this be something to consider?

    I really think you are onto something in eliminating most of the exemptions, for there are too many of narrow focus earmarked for just a few businesses.

    I suggest that the General Assembly slash the exemptions and concentrate on enforcement of existing sales and use taxes – something that has not received due resources during my experience – for a couple of years before becoming totally dependent upon sales tax.

    There is no question that abruptly killing the property tax is POPULAR, but is it prudent, given the known unknowns?

    I don’t know what models and forecasting tools you are using, but the Wall Street Quants, geniuses from the best business schools in the country, and the financial captains of the US seem to be having apocalyptic disasters erupting from theirs these days.

  45. eehrhart says:

    This really is a productive discussion and as usual Indy you are asking relevant questions with respect to detail. I am again serious about asking you to participate in the discussion and to make this plan work.

    Icarus….from my perspective and I feel it is also the Speakers; of your premises all are good EXCEPT number 5, and the first part of 4 which keeps existing spending levels. If you mean at the state level I am more interested in drawing down spending. At the local level it is not my business as a state legislator to tell them how to spend the taxpayers money. As a taxpayer though I would hope they would accept the same premise.

  46. Donkey Kong says:

    Indy,

    Are you in accounting?

    I too am concerned with giving the state so much power. However, I vigorously support eliminating property taxes in favor of a service tax. I am in the service industry, and will be for the rest of my life, so this will directly effect me. We are a service economy, and land owners and manufacturers of tangible goods should not bear the tax burden.

    Dorian,

    How can rural Georgia be opposed to this bill? I understand the concern over local control. However, rural Georgians are the largest land owners in the state. This new tax structure would shift the tax burden away from rural Georgians toward Atlanta and its service industry.

    Money is power. My concern is the politics that will inevitably be played with the money. As long as there are safeguards to ensure that some locality does not get screwed out of their money because of their political orientation, which Rep. Ehrhart says there is (guaranteeing they will receive at minimum their current level of funding), then this might be a good plan.

    Rep. Ehrhart,

    How much bureaucracy will this add to the state level? Will a new department be created to handle this?

  47. dorian says:

    Donkey you are thinking of land in terms of acres and not value. You could own a house off the 280 loop in Cobb County that is worth as much as a small farm down here. To be certain, there are some major landowners who own several thousand acres, but I would hardly fine them to be representative of the general population. Plus, you would probably be surprised home much acerage the gov’t owns. You get a homestead exemption for your house, a conservation exemption (if you want it), and other types of breaks if you farm. The primary residence of senior citizens is completely exempt from property taxes. Anyway, my small part of rural Georgia sees this as an Atlanta power grab and not a politician representing their interest(s) in any way. Hearing us hicks talk about this amongst ourselves would be an entertaining thing to watch, I imagine.

  48. Icarus says:

    I’m in the middle of a busy day for once, so I can’t give the responses above the justice they deserve, but I’ll give a few quick shots and try to fill in later.

    Of the premises I listed above, #3 (provide equal services among unequal districts) contradicts #2 & 7 (cut taxes, give money back to the people).

    There is no way that you will be increasing funding in areas with lower property tax digests to increase their spending to that of high tax digest areas while cutting taxes. The only way to equalize services would be to cut spending in high digest areas, or force these areas to raise their local sales taxes even higher to compensate for their reduced allotment.

    Then there’s the argument of guaranteed funding at existing levels. What if, instead of picking today’s date, we used the funding levels of 1957 and adjusted for inflation. I use this example because it could well be 50 years before another tax “reform” is tried again. How does this plan adjust for growth patterns (which will certainly happen after the economic boom that is expected)? Again, the state, over time, will gradually control more and more of local affairs if this bill passes.

  49. Donkey Kong says:

    “Donkey you are thinking of land in terms of acres and not value.”

    Touche.

    I haven’t spent much time thinking this through, but if the real problem is with property taxes and a sales tax that does not extend to all services, can the state pass legislation outlawing property taxes, forcing localities to tax at the consumption level instead? I would think that this one legislation would require localities to both increase consumption tax rates and broaden their tax base to raise sufficient revenue, having the end result of both eliminating property taxes and extending consumption tax to all goods and services. I know it sounds less sexy than the Great Tax Plan, but it might be more effective. If FL and other states can eliminate income tax, why don’t we just eliminate property tax?

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