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Local leaders object to state tax proposal
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A new state tax proposal which would replace all Georgia ad valorem taxes with a wider sales tax is not going over well with county and city officials who fear it could jeopardize local services.

This fear however has not kept several Newton County state representatives from supporting it. State Rep. John Lunsford (R-McDonough) - whose district covers parts of Newton County - has written a letter, posted on his Web-site supporting the tax proposal.

While State Rep. Doug Holt (R-Covington) said he couldn't take a position on the proposal until some of its finer details were ironed out - he did say that he was conceptually in favor of it.

Championed by Speaker of the House Glenn Richardson (R-Hiram), "Georgia's Repeal of Every Ad-valorem Tax" or the GREAT Plan proposes to replace one of the most detested taxes in the state - the yearly property tax - with a wider sales tax on services.

The plan does not propose raising sales taxes but widening them to include taxes on such services as haircuts, car repairs and trips to the dentist. Richardson is emphasizing the fact that this plan advocates a tax transfer, not tax relief.

 The plan has already drawn sharp criticism from the Georgia Municipal Association, the Association County Commissioners of Georgia and the Georgia School Boards Association.

Arousing great concern with local officials is the fact that the plan would take away the ability of local governments to set and collect their own taxes. All taxes (with the exception of taxes collected by the federal government) would now be collected by the state and distributed by the Georgia General Assembly.

A formula for the disbursement of all collected revenues - which has yet to be revealed - would be based on actual property taxes collected by each local jurisdiction in 2006 and increased annually by applying a population growth and an inflationary factor to the base amount.

However critics of the proposal point out that rates of inflation and population growth vary across the state and wonder if any formula could ever be reactive enough.

Newton County School System Superintendent Dr. Steven Whatley said he was concerned the new tax system would be relying on a tax base which is not guaranteed and can vary widely in times of economic recession when Georgians are not spending as much, resulting in lower tax collections.

"How will you fund existing programs?" asked Whatley?"

Critics of the proposal also fear that services will be threatened when tax revenues become tied up in the bureaucracy and in-party squabbling which has lately characterized the General Assembly.

With Republicans in control of both chambers and the Governor's Mansion, what should have been a smooth session in 2007 became bogged down by budget fighting and political grandstanding lead by Richardson on one side and Governor Sonny Perdue on the other.

Important issues such as the $7.7 billion shortfall the Georgia Department of Transportation is facing were hardly touched during the past session while the issue of solving the Peach Care funding crisis got largely lost in a fight between the House and the Senate, again lead by Richardson on one side and Lt. Governor Casey Cagle on the other. Incidentally, Richardson and Cagle are also the two widely rumored frontrunner candidates for the governor's race in 2010.

With their recent performance in mind, the question weighing heavily on the minds of local officials across the state is can the General Assembly handle the additional responsibility of distributing even more tax dollars to local governments.

"The legislature has been picking on locals for the last ten years," said Covington Mayor Sam Ramsey at a Wednesday Covington/Newton County Chamber of Commerce event. "I tell you, middle class America had better wake up and realize what's happening to us."

For counties such as Newton County, which relies heavily on property taxes, there is the concern that if the proposal passes, neighboring counties such as Rockdale County - which has a much larger commercial base - will take credit for the many sales tax dollars collected from their counties by residents coming from other locations.

"There's just so much on this plan that we don't have clear answers to," said Newton County Chairman Aaron Varner. "It very could well be that we become a donor county. Nobody has sat down and told us how this money is going to be accounted for and disbursed."

The reverse concern is that initially the tax proposal will reward counties which have previously relied heavily on the property tax and punish those counties which have a more diversified tax base.

These are just a few of the many concerns raised by the proposal. However with Richardson and other proponents hoping to get the proposal passed out of the legislature and onto the 2008 ballot for approval by Georgia voters, there doesn't seem to be very much time left for the many issues raised to be ironed out before the legislature reconvenes in January.

"I'm very concerned that this thing is going to be something that a lot of people haven't thought through," Varner said. "If this thing's given adequate debate there are going to be a lot of issues that I don't see being worked out. I hope we have enough debate to bring out the flaws in it.

"If you can show me a plan that has been well thought out and answers all my questions then it may be something that I can support but until I see it I am not going to support this thing until I get all my questions answered," Varner said.

For more on the GREAT plan, the ACCG has written a lengthy memo on the matter which can be found at