0

Perdue criticizes Richardson's tax plan

ATLANTA - Gov. Sonny Perdue expressed serious doubts Monday about House Speaker Glenn Richardson's tax plan, even as the speaker's office for the first time attached financial numbers to his proposals.

As the governor was describing his fellow Republican's tax reforms as a "gamble" to fix a tax system that isn't broken, Richardson, R-Hiram, was trotting out figures aimed at showing his plan isn't as risky as critics are claiming.

The speaker has been crisscrossing Georgia for months touting a constitutional amendment that would abolish property taxes in Georgia and replace the lost revenue with an expanded sales tax.

But during a luncheon speech to the Atlanta Press Club, Perdue questioned the need for such a dramatic overhaul.

The governor pointed to recent accolades Georgia has won as a business friendly state, which he said is due in part to a stable tax system.

On the other hand, Perdue pointed to states that have run into fiscal problems, including a $1 billion budget shortfall that forced lawmakers in Florida into a special session last month.

"Georgia is in pretty good shape," he said. "We are not facing financial crises like in other states, and we don't need to create one in our state."

Critics of Richardson's plan have questioned how extending Georgia's 4 percent sales tax to services as well as goods would raise enough revenue to replace the $9.6 billion generated by property taxes each year.

On Monday, the speaker's office released figures showing that his plan would only have to produce about $4.6 billion a year in revenue - less than half of the proceeds from property taxes.

Most of the $5 billion difference would come from an estimated $2.8 billion in additional local-option sales tax money that would be generated by the expanded sales taxes the speaker envisions.

The rest would come from the limited amount of property taxes that some Georgia businesses and individuals would continue to pay under Richardson's plan.

Members of the House Republican caucus who met with the speaker on Monday were given those numbers in addition to hearing him present his plan and answer questions.

But Rep. Bobby Reese, R-Sugar Hill, said some lawmakers still came away concerned about requiring Georgians to pay sales taxes for services that currently aren't taxed.

"We've got a bunch of strong-willed Republicans, some independent thinkers," he said. "Some of them are still hung up on the service charges."