Georgia speaker says tax cuts will help economy

Encouraging small business growth and initiating tax cuts are the keys to saving Georgia's economy, state Speaker of the House David Ralston said Thursday.


"I believe the best way out of the economic situation we're in is growth, not increasing taxes," said Ralston, who was the keynote speaker during a Columbia County Chamber of Commerce post-legislative breakfast at Savannah Rapids Pavilion.

Ralston, a Republican from Blue Ridge, Ga., said Georgia needs to be a pro-growth state and avoid economic catastrophes such as what is happening in California.

California lawmakers have "raised every conceivable tax" and as a result "small businesses are closing in droves and leaving," Ralston said.

"There we have the template of what not to do," he said. "We're committed to not do that."

During the recent legislative session, Ralston said the General Assembly formed a council modeled after the Base Realignment and Closure committee to scrutinize Georgia's tax code. He hopes their recommendations, due in January, will include relief for small businesses.

"We're going to grow our way out of it (the recession)," he said.

Despite the optimistic outlook, the first-year speaker called this year's legislative session a "monumental challenge."

During the past two years, lawmakers have cut the state budget by 20 percent, which equates to about $4 billion.

"We did what you do" when legislators are constitutionally obligated to balance the budget and revenues have declined, said Rep. Ben Harbin, who spoke before Ralston.

Harbin, R-Evans, said state departments were asked to cut expenses by 10 percent, except education, which endured a 6 percent cut in state funding.

Lawmakers eventually created a $17.8 billion budget for next fiscal year.

Still, there is reason for optimism, said Harbin, the chairman of the House Appropriations Committee.

Sales tax and motor fuel tax revenues are rising, which means consumers are spending more.

"The economy is moving in the right direction," he said.