ATLANTA — Key legislators said Tuesday that tax reform will be the main issue of the legislative session that starts next month, but how to solve it remains elusive.
Efforts to pass a sweeping tax-reform package bogged down in the final days of the last regular session. It would have extended the sales to tax to include dozens of services and groceries while lowering the income tax and eliminating the tax factories pay on energy used in manufacturing.
In the days leading up to the coming session, legislative leaders are again talking about pushing the package through, but with some changes to make is politically more palatable. They just haven’t figured out what those changes should be.
“I’m open to see how we can get it done,” House Democratic Leader Stacey Abrams said during Tuesday’s breakfast meeting of the Atlanta Regional Commission.
Abrams, a tax attorney who represents Atlanta, said removing the energy tax to attract job-producing factories to the state would lower the state’s revenue by $137 million that would need to be replaced.
“Georgia has a revenue problem, not a spending problem,” she said.
However, taxing food would result in a tax increase for all Georgians earning less than $80,000, even after lowering the income tax.
On the other hand, Senate Republican Leader Chip Rogers of Woodstock said the jobs that result from luring more factories is a worthwhile fiscal goal.
“We don’t need higher taxes. We need more taxpayers,” he said.
Senate Republicans offered three proposals Monday to a House-Senate committee considering the tax-reform package. One would tax food while the other two would raise the tax on a pack of cigarettes $1 or raise the current sales tax another penny per dollar purchase, as all different alternatives to replacing the revenue given up by eliminating the manufacturing-energy tax.
Advocacy groups that fought the food tax last session have already renewed their objections.
Overnight Monday, the AARP retiree organization emailed all of its Georgia members urging them to contact their lawmakers in opposition to taxing food. While half of AARP’s members are still working and would presumably favor attracting more jobs, its leaders argue that a higher grocery bill is painful for those living on a fixed retirement income.