Gone is the GREAT Plan

The Covington News - - Opinion -

One of the is­sues I wrote about on Feb. 22 was House Speaker Glenn Richard­son’s ever evolv­ing tax plan. The GREAT Plan, an acro­nym that stood for Ge­or­gia’s Re­peal of Ev­ery Ad Val­orem Tax, orig­i­nally started out as a pro­posal that elim­i­nated ev­ery prop­erty tax, from the ve­hi­cle ad val­orem tax to lo­cal prop­erty taxes, and would have also elim­i­nated some sales tax ex­emp­tions on ser­vices. Schools sys­tems and lo­cal gov­ern­ments would have re­ceived sub­si­dies from the state to fund op­er­a­tions and projects.

This rad­i­cal pro­posed change in fund­ing had lo­cal gov­ern­ments up in arms. An ar­ti­cle from last Septem­ber by our own Rachel Oswald high­lighted some of the an­i­mos­ity to­wards the pro­posal from sev­eral New­ton County lead­ers. It seems that the op­po­si­tion was strong be­cause the plan was not prop­erly pre­sented and left many ques­tions unan­swered.

The plan un­der­went many changes in the fol­low­ing months. The ver­sion that I wrote about just two weeks ago elim­i­nated the school por­tion of the prop­erty tax and sales tax ex­emp­tions on 174 ser­vices such as hair­cuts, waste man­age­ment and gro­ceries. School boards still balked at the plan.

Democrats in the State House an­nounced their in­ten­tion to vote against the plan last week. It was bad news for Richard­son. He was re­ly­ing on some Democrats to de­fect and vote for the GREAT Plan be­cause of weak sup­port in his own cau­cus.

Grover Norquist, head of the pro-tax­payer or­ga­ni­za­tion Amer­i­cans for Tax Re­form, blasted the GREAT Plan. In a let­ter to state leg­is­la­tors, Norquist wrote, “Tax­pay­ers of­ten­times find them­selves on the los­ing side of the bar­gain when com­pre­hen­sive ‘re­form’ is on the ta­ble.” He also added, and this is ab­so­lutely cor­rect in my view, “This plan, which has been mod­i­fied nu­mer­ous times, is now be­ing fast-tracked with lit­tle room

Make no mis­take about it this was Speaker Glenn Richard­son’s at­tempt

at sav­ing face.

for leg­is­la­tors to an­a­lyze or fully digest the con­se­quences to tax­pay­ers. This is not the way to set tax pol­icy.”

On Tues­day, me­dia out­lets re­ported an­other change in the pro­posal, in­clud­ing a name change. Gone is the GREAT Plan. In its place came the Prop­erty Tax Re­form Amend­ment. The new plan still would have done away with the ad val­orem tax on ve­hi­cles by July 1, 2010, a tax cut of just over a bil­lion dol­lars over two years. It also would have frozen prop­erty tax as­sess­ments at 2008 lev­els and placed lim­its on how much they can grow — end­ing back­door tax in­creases by lo­cal gov­ern­ments. It also placed re­stric­tions on how much lo­cal gov­ern­ments can spend by cap­ping out­lays at 2008 lev­els; how­ever, it al­lowed spend­ing to in­crease with the rate of gov­ern­men­tal in­fla­tion each year. A mech­a­nism is pro­vided in the bill that would per­mit lo­cal gov­ern­ments to spend above the rate of in­fla­tion, but this would have needed ap­proval by vot­ers through a bal­lot ques­tion.

The House Rules Com­mit­tee placed the pro­posal on the cal­en­dar for de­bate the next day.

The latest in­car­na­tion of this plan seemed like mean­ing­ful re­form that pro­vided re­lief for home­own­ers and did not strip away home rule from lo­cal gov­ern­ments. De­spite the fact that they had con­demned the GREAT Plan the pre­vi­ous week, Amer­i­cans for Tax Re­form en­dorsed the Prop­erty Tax Re­form Amend­ment as did the Amer­i­cans for Pros­per­ity and the Repub­li­can Lib­erty Cau­cus of Ge­or­gia.

One item of cau­tion was that the pro­posal did not in­clude spend­ing re­form at the state level. While the pro­posal was a mas­sive tax cut over two years, there were ab­so­lutely no guar­an­tees that there would be a cut in spend­ing. With­out spend­ing cuts, this tax re­form plan would have been merely a tax shift.

De­bate on the Prop­erty Tax Re­form Amend­ment be­gan at just be­fore 2:30 p.m. Wednes- day. The Repub­li­can cau­cus in the House seemed to co­a­lesce be­hind the pro­posal. Democrats, how­ever, stilled played the wild card. There were no real signs as to how party lead­ers were urg­ing mem­bers to vote. Even if ev­ery Repub­li­can in the House voted for Richard­son’s plan, sup­port from Democrats would be needed to achieve the re­quired 120 votes to pass, the twothirds ma­jor­ity re­quired to pass a con­sti­tu­tional amend­ment.

In the end, the Prop­erty Tax Re­form Amend­ment fell short by ten votes — only seven Democrats crossed over to back the pro­posal. There was no mo­tion to re­con­sider the ac­tion. Repub­li­can lead­ers in the House im­me­di­ately started point­ing fin­gers at Democrats, claim­ing that they killed a tax cut. We should ex­pect this to be the fea­ture of cam­paign ads in the fall.

While it is true that the over­whelm­ing ma­jor­ity of Democrats voted against a tax cut, blame does not solely rest on their shoul­ders. If Repub­li­cans want to place blame some­where, they need not look any fur­ther than Speaker Glenn Richard­son.

Had the is­sue not been han­dled so poorly, ques­tions about the plan could have been an­swered to settle the nerves of lo­cal gov­ern­ments and school boards. Per­haps some Demo­cratic leg­is­la­tors could have care­fully re­viewed the amend­ment over a longer pe­riod of time, as op­posed to the 24 hours they were given to make sense of a pro­posal that had evolved so much over the last six months and been the source of so much con­tention. In the end, I don’t be­lieve Democrats can be blamed for this.

Make no mis­take about it, this was Speaker Glenn Richard­son’s at­tempt at sav­ing face. Tax­pay­ers would have only ben­e­fited from this latest pro­posal as a by-prod­uct of the Speaker at­tempt­ing to sal­vage his ego. Richard­son has spent so much po­lit­i­cal cap­i­tal in the last year only to be met with de­feat at ev­ery turn, and it is not lim­ited to the GREAT Plan and the Prop­erty Tax Re­form Amend­ment.

Per­haps it is time for Glenn Richard­son to step aside.

Ja­son Pye

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