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Hearings open on speaker's tax reforms

ATLANTA - A new version of Speaker Glenn Richardson's tax reform plan received its first airing Tuesday at a House committee hearing.

But opponents voiced the same criticisms that have surrounded the proposal during the months that Richardson, R-Hiram, traveled the state promoting it.

Representatives of school systems and local governments and lobbyists for progressive advocacy groups complained that the speaker's plan to do away with most school property taxes and replace the lost revenue with an expanded sales tax would be unfair to taxpayers and deprive school districts of control over what should be local funding decisions.

On the fairness issue, the measure's critics said converting to a tax system that relies more on sales taxes and less on property taxes would disproportionately affect lower-income Georgians, who spend a higher percentage of their incomes on basic necessities.

The plan calls for removing the current sales-tax exemption on groceries.

"How is this not a shifting of the tax burden from the wealthy to the poor?" asked Cam Jordan, community development director for the city of Fitzgerald.

Richardson's original proposal also would have applied to property taxes collected by cities and counties.

Municipal officials are worried that if the current version limited to school taxes becomes law, local governments would be the speaker's next target.

The proposal's critics also argued that sales taxes are more vulnerable to economic downturns than property taxes because consumers curb their spending during recessions.

Jim Mullins of the DeKalb County school system warned that under Richardson's plan, sluggish sales tax collections would force cash-starved schools to cut art, music and athletics programs.

"We are at the verge of a recession," Mullins said. "When that happens, your sales tax will take the largest hit."

Jeff Hubbard, president of the Georgia Association of Educators, said losing the ability to levy property taxes would cost local school boards control over their budgets.

"Local governments should be responsible for making local funding decisions, not the state," he said.

Richardson is due to appear before the Ways and Means Committee when the hearing continues Wednesday to defend his plan.

But in his absence on Tuesday, the speaker drew support from self-described "Georgia taxpayers" who appeared before the panel.

William Lively of Cobb County complained that the taxes on a second home he owns in Union County have increased by 245 percent since 1993.

Larry Morey of Henry County, who served as a Mitchell County commissioner from 1988-92, said the rural Southwest Georgia county's budget has skyrocketed from $7.9 million when he left office to $17.9 million today, far outstripping population growth.

"We've got to get our heads out of the sand and change things in Georgia ... or your children and grandchildren are going to pay the price," he said.