Eggs and Issues

Gov. Deal’s first applause line this morning was about repealing the sales tax on energy used in manufacturing.

“In an age of much higher energy costs, this will impact a large component of manufacturers’ overall cost structure and vastly improve the competitive position of our producers,” Deal said. “Today, in executive offices right here in Georgia, business leaders are making the business decision to expand manufacturing activity and facilities in neighboring states. Every time they make that decision, we miss out on new investment in our communities and new job opportunities for Georgians.”

Deal also premiered two new tax cut proposals.

Two other proposals are new. One would exempt large developments from sales tax on construction materials. He also wants to extend to small businesses a tax credit for the creation of 50 jobs. He’ll lower that threshold to just 15 new hires.

“This will reshape the landscape in Georgia for small-business owners,” he said. “Most companies now listed in the S&P 500 began with 50 or fewer employees.”

He also said he is asking for $46 million in bond funding to help local communities build reservoirs to augment their supply of drinking water.

Speaking of water, Deal said, “”We must create new reservoirs to address Georgia’s long-term water needs.”

Deal discussed the deepening project for Savannah:

[Deal] announced he will recommend another $47 million in bond borrowing for the deepening of the shipping channel in the Savannah River while continuing to lobby Washington for federal funding. The new money would bring $136 million in state funding toward the $600 million project.

“A completed harbor expansion means a more competitive Georgia, offering customers greater value,” he said in a speech at the Georgia Chamber of Commerce’s annual Eggs and Issues breakfast. “I can assure you that we are doing everything in our power to see this project through to completion.”

8 comments

  1. saltycracker says:

    Define large development…businesses generally pay their share & this might help but if it includes residential….that would be beyond irresponsible and a citizen sellout as those taxes go toward services severely underfunded….

  2. Dave Bearse says:

    If it’s good tax policy that taxes be broader and flatter, why do all the current tax proposals (except imposing a state sales taxes on groceries to be used to disproportionately cut income taxes on the rich) seem to narrow the tax base?

    • The Last Democrat in Georgia says:

      To curry ‘favor’ (as in gifts, meals, money, trips, etc) with lobbyists who might not have as much incentive to keep giving gifts if there were no state income tax to lobby to be exempted from, for starters.

  3. benevolus says:

    I sure wish there was a way to track the effectiveness of those tax breaks. I am skeptical that a company is saying “if only I could get a tax break I would hire 15 people”. Instead, it seems more likely that companies who were already going to hire (because there is demand for their product!) will get a gift.

    • Todd Rehm says:

      It depends on what kind of company you’re talking about, and the scale of the operation.

      Large industrial manufacturers, for whom energy costs equal or surpass their payroll, will certainly look at the price of energy when deciding to shift load between say, manufacturing plants in Georgia and Tennessee, Alabama or South Carolina. And several major Georgia employers also have sister plants in neighboring states.

      Electricity cost will also be taken into account when deciding which of multiple plants will get upgrades, and thus longer useful life.

      Having done some research, it appears that this is a major consideration in some of Georgia’s larger industries. Of course, the sales tax is only part of the cost, but it’s a part that Georgia can do something to reduce.

      • benevolus says:

        That scenario is more about not losing jobs than creating them.
        I have an idea, why don’t we incentivize small businesses and startups; people who already live here and aren’t threatening to go somewhere else.

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