GOP tax plan risks major budget shortfall, critics say
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
Republican Georgia lawmakers are pitching income tax cut packages that critics warn could create major gaps in state and local budgets.
Why it matters: A proposal coming out of the Georgia Senate — along with a separate House plan to scale back property taxes — is Republicans' answer to voters demanding help with the high cost of living.
- The plans come as government officials continue to gauge the fiscal fallout from declining federal funding and could dominate debate when the election-year legislative session starts on Monday, Jan. 12.
Zoom in: On Wednesday, a state Senate study committee recommended the Republican-controlled General Assembly drastically slice income taxes and eventually do away with the levy altogether.
How it works: Under Senate Republicans' proposal, married couples would not pay tax on their first $100,000 in income starting in 2027, saving them on average more than $5,000. Single filers would get a break on the first $50,000.
Follow the money: Income taxes are Georgia's biggest revenue source and generate roughly $16 billion — almost half the state's budget — to pay for education, health care and other core government programs.
- The plan doesn't propose replacing those revenues. Sen. Blake Tillery (R-LaGrange), who chairs the committee, told the AJC that surplus revenues would cover the first year, followed by cuts to tax credits and exemptions.
Yes, but: Yes, but: The Georgia Budget and Policy Institute, a think tank that advocates for strong safety net programs, told WABE that eliminating the income tax would require tripling Georgia's sales tax to make up the shortfall.
- Republicans say sales tax hikes are not on the table.
Zoom out: On Wednesday, House Speaker Jon Burns (R-Newington) said his tax cut proposal could include doing away with property taxes on people's primary residences.