Taxes and Budgets – Wallet Items from the Legislature

Baker Owens

Friday, April 2nd, 2021

To read all of InsiderAdvantge Georgia’s daily news, SUBSCRIBE HERE. *Subscription includes a complimentary subscription to JAMES Magazine.

As the gavel came down on Sine Die on Wednesday, a look at some of the highlights regarding the actual dollar-related legislation.

The Budget

First up, the budget. The one thing the legislature is required to do before said gavel finds its home and the confetti comes down. And as is increasingly becoming routine, one of the last things that gets passed by the legislature. This year the budget didn’t pass until 11:25 pm on Day 40.

The $27.2 billion bill claws back some of the cuts that agencies saw in 2020 due to the pandemic – including more than half of the cuts to education spending, as well as pay increases for law enforcement, nearly $1 billion for new construction projects, and more than $50 million for mental health services. Another $50 million was dedicated to rural Georgia, with $40 million going to a rural innovation fund and $10 going to rural broadband – something of a priority for a few years and then under a glaring spotlight during Covid-19.

More details about the budget coming in the next few days.

Tax breaks 

Delta CEO Ed Bastian may have made a mistake on Wednesday as he came out against the recent election law changes. By not waiting a day, Bastian left the door open for retribution by the legislature and at 11:00 on Sine Die, a proposal to start collecting taxes on jet fuel in Georgia was introduced. The bill to extend the tax breaks on jet fuel has been thorny before but the elections law pushback from Bastian had Republicans upset much of the day on Wednesday.

The House passed the fuel tax but with less than an hour remaining, the Senate didn’t take up the bill and adjourned first at 12:02. Something to remember though, the Georgia legislature technically consists of two-year sessions so the bill will still be alive for next year.

SB 6 

The Tax Credit Return on Investment Act, sponsored by Sen. John Albers (R-56 Roswell), provides for economic analysis of certain tax breaks upon request and creates the Special Council on Tax Reform and Fairness for Georgians. In short, the legislature will be turning some extra attention to tax breaks and credits to confirm they are performing as expected or in the way they were originally intended.

Somewhat ironically, the bill also contains a fresh round of tax breaks for certain items, including medical equipment and supplies manufacturers, high-impact aerospace defense projects and to Class III railroads.

HB 32 is another bill aimed at improving the economy and workforce of rural areas. The bill is meant to recruit and retain teachers in certain rural districts or low-performing schools in high-need subject areas by providing a tax credit of $3,000 to those teachers that qualify.

Tax cuts

HB 593 provides a small income tax cut – less than $100 on average for a couple filing jointly – that got a boost when the state received funding from the Covid-19 relief bill. The bill only applies to those using the standard deduction, which limits the recipients of the tax cut somewhat to the lower and middle income.

The bill had already been under consideration but the money from the Covid-19 relief bill made the decision a little easier for Georgia Republicans, despite some language in the bill from Washington that it not go to tax cuts. Republicans challenged the enforcement of that language, both regarding federal overreach and whether it would apply to Georgia because the bill had already been under consideration.