Leader seeks tax overhaul

ATLANTA --- The chairman of the Senate Appropriations Committee renewed his call for an overhaul of the state's sales tax, saying the current budget deficit could provide the spark to make changes.

Sen. Jack Hill, R-Reidsville, told a group of advocates for greater spending on social services Thursday that this fiscal year's budget deficit could balloon to $2 billion and require cutting as much as 11 percent of the budget to balance it. That could cause leaders to consider changes in where the revenue originates.

One area for reform, said Mr. Hill, is the sales-tax system, which has not been growing in recent years as the state's population and overall economy has expanded.

"I would not argue that our revenue structure, particularly the sales-tax side, does not reflect the growth in the economy," he said.

"Our sales-tax revenue is essentially flat. ... Our sales-tax structure does not cover the present purchasing of services and the way we spend our money that has moved away from the items that are covered," Mr. Hill said.

He has often proposed a commission to study the matter and offer recommendations. He said he favors adjustments that would not bring in more taxes immediately but would grow faster when the economy does.

Mr. Hill made his comments at a seminar hosted by the Georgia Budget and Policy Institute, which issued a recommendation to raise some taxes and limit breaks given to businesses and parents. The added money would reduce the need for budget cuts.

Raising the income tax from the maximum 6 percent to 7 percent on couples earning more than $400,000 would bring in an additional $220 million, for instance, according the policy institute's figures.

More revenue could come from limiting the child-care credit that high-earning families claim, delaying implementation of a tax break for insurance companies selling high-deductible health plans and boosting the cigarette tax $1 per pack.

Walter Jones can be reached at walter.jones@morris.com or (404) 589-8424.