0

Democrats propose tax cut, increased school spending

ATLANTA - Legislative Democrats unveiled a tax reform plan Tuesday with a twist aimed at Gov. Sonny Perdue's cuts to education.

Democratic leaders announced they will introduce two bills that would first stop the governor's annual "austerity" reductions in K-12 per-pupil spending and eventually fully fund a state school formula enacted nearly a quarter century ago.

Passing the two measures would encourage local school systems, which have been forced to raise property taxes to cope with the governor's cuts, to roll back those increases, said Sen. Kasim Reed, D-Atlanta.

"This is both a tax cut and an investment in education," he said.

Republican leaders, who hold solid majorities in the House and Senate, quickly dismissed the proposal as more of a spending increase than a reduction in taxes.

Democrats will offer the legislative package as an alternative to GOP House Speaker Glenn Richardson's plan to eliminate most school property taxes and replace that revenue with an expanded sales tax.

"This creates no new taxes and shifts no taxes," said Rep. Jeanette Jamieson, D-Toccoa, chief sponsor of one of the bills. "The property taxpayer is guaranteed tax relief."

Jamieson's bill would provide short-term tax relief by drawing down the state's record $1.5 billion surplus by $300 million during each of the next two years.

The money would go into a fund that local school systems could tap into by committing to rolling back the property taxes they have raised since Perdue took office.

While increasing education spending overall to account for growing student enrollment, the governor has cut about $1.5 billion from the per-pupil funding formula during the past six years.

Perdue justified the reductions early on by citing an economic slowdown that was hurting tax collections. The annual cuts continued after the economy picked up, although they have been smaller.

The second bill would require the state to fully fund the Quality Basic Education Act, which the legislature passed during the 1980s creating the per-pupil formula.

The state has never fully funded the QBE formula, including the years when Democrats were in control of the governor's office and General Assembly.

"This is a long-term way to say the state of Georgia absolutely cannot be in the business of starving local school systems," said Rep. Kathy Ashe, D-Atlanta, the bill's chief sponsor.

The price tag of fully funding QBE would be a whopping $2.5 billion, a figure that prompted Republicans to charge that Democrats aren't being sincere about wanting to cut taxes.

"Their proposal is not tax reform," said House Majority Leader Jerry Keen, R-St. Simons Island. "It is more spending."

Taking their cue from Perdue, Republicans have been strong advocates for preserving the state's reserves as a hedge against another recession.

"At a time when there is a lot of uncertainty about the state of our economy, now is not the time to begin dipping into our state's reserve funds," Keen said.

But even some of the governor's fellow Republicans have expressed concern over the austerity cuts to education.

Last week, state Schools Superintendent Kathy Cox told legislative budget writers she was disappointed with the reductions. Rep. Ben Harbin, R-Evans, chairman of the House Appropriations Committee, vowed to take a close look at them as his panel reviews the governor's budget request.

SideBar: At a glance

One of two bills legislative Democrats announced Tuesday is aimed at restoring "austerity" cuts in school formula funding imposed by Gov. Sonny Perdue every year since he took office. The governor has eased up on the reductions in the last three years as the state's economy improved:

Fiscal year

Amount

2009

$141.5 million (proposed)

2008

$143.0 million

2007

$169.7 million

2006

$332.8 million

2005

$332.8 million

2004

$283.5 million

2003

$134.6 million (mid-year)

TOTAL:

$1.5 billion

Source: Governor's Office of Planning and Budget