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Conservatives want tax cuts to balance the budget.

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Fiscal Responsibility, Georgia Style

Conservatives want tax cuts to balance the budget.

Like most states, Georgia must balance its budget each year. Each year, the legislature passes the annual budget and then passes a supplemental budget to take care of any problems that arise during the year relating to revenues.  

In the past, Georgia’s economy seemed to be recession proof.  The growth of the state’s economy exceeded its losses year after year, including last year.  Even in other economic downturns, Georgia didn’t suffer as much as the rest of the country and recovered quickly.  This time it was different.  Due to consistent growth, construction was a constant supply of good jobs and the ripple effect in the economy seemed recession proof.  That all changed last year with the collapse of the housing bubble and Georgia started to lose jobs in all sectors.  Unemployment is higher than the national average and the state faced more than a 2 billion dollar shortfall. The Republican controlled legislature had its work cut out for it. .

The economic downturn — and the Obama multi-trillion dollar spending spree — seemed to limit the choices the legislature had.  

Enter Georgia State Rep. Tom Graves. In mid-February, Graves announced his Jobs, Opportunity, and Business Success Act of 2009 (JOBS).

 ”For some reason people in Washington seem to think that only big government spending programs can lift us out of this economic recession,” Graves said on the day his bill was announced.  Graves plan would cut the state inventory tax, eliminate the sales tax deposit, give tax credits to businesses hiring workers that are currently unemployed, cut the capital gains tax in half and eliminate the outdated net worth tax.

 “We started learning what the Washington stimulus package was and we decided there was another direction to go.  If we empower the people instead of the government, economic recovery will occur. The beacon of the nation’s recovery is job creation.” Graves said regarding the legislation waiting to be signed by the governor.

Opponents drag out the old “tax cuts for the rich” mantra.  This is definitely a pro-business set of tax cuts, but most jobs are created by small businesses so that’s where the emphasis ought to be placed.

Both the Georgia House and Senate haggled about the bill, but ended by passing it with broad bi-partisan support.

The key now is whether the Governor will sign it.  The final day to sign or veto bills from this legislative session is May 13th and sources close to the Governor say he’s waiting for April revenue numbers to make his final decision on whether to sign the bill.  

The first Republican Governor in Georgia since Reconstruction has had a mixed record on tax cuts.  In addition, he’s had a less than congenial relationship with the fiscally conservative, tax cutting wing of the Republican Party in the legislature and all indications are he’ll wait to decide on whether to sign or veto the JOBS Act of 2009 until the last possible minute.

Just passing tax cuts in this economy should make this session a success, but there’s more.  Led by State Senator Chip Rogers, fiscally conservative Republicans joined by conservative Democrats did what seemed to be impossible. “We balanced two budgets in three months by cutting three billion dollars in spending and the State of Georgia did not come to a screeching halt. We rejected every proposal for a tax increase and we actually cut taxes.  That’s the opposite of what is happening in Washington. Georgia took a different approach,” said Rogers last week.

Georgia did what the rest of the country ought to be doing. Georgia came up with its own stimulus package that is pro-growth, pro-business and free market based.  Arthur Laffer, the best known economist from the Reagan era, said, “If Governor Perdue signs a tax cut, Georgia will be dramatically increasing its competitiveness relative to other tax-raising states.” And in this topsy-turvy economic climate, remaining competitive among the states is key.”

So the fate of the JOBS Act of 2009 is now in the hands of Governor Perdue.  He must sign this bill into law because it will bring new businesses into the state and help those already here thrive.   

If it works in Georgia this year, many states will follow next year. That’s how government helps a recovery, by getting out of the way.

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Written By

Ms. Zoller, a recovering congressional candidate, is a political analyst and conservative talk show host for WXKT FM 103.7 in Gainesville, Georgia and syndicated on The Georgia News Network. She is one of the Talkers Magazine "Heavy Hundred" Talk Shows in America. She can be seen regularly on cable news. She is the author of "Indivisible: Uniting Values for a Divided America." You may contact her through www.marthazoller.com.

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