House OKs rural tax credit program with troubled history
The state House of Representatives overwhelmingly passed legislation Tuesday, Feb. 22, to authorize a second round of funding for a rural tax credit program created during the last decade.
The Georgia Agribusiness and Rural Jobs Act (GARJA), which cleared the House 153-11 and now moves to the state Senate, would provide $100 million in tax credits to companies in rural areas of the state with fewer than 250 employees, starting Aug. 1.
“This gives rural agricultural businesses another opportunity to borrow money,” said Rep. James Burchett, R-Waycross, the bill’s chief sponsor.
“In this state, small and mid-size family farmers are having to overcome obstacles that are vastly different from what we grew up with,” added Rep. Winfred Dukes, D-Albany.
Despite the strong support for the bill Tuesday, Feb. 22, the tax credit has a checkered history in Georgia. Supporters tried to authorize a second round of funding last year as part of an omnibus tax credit bill, but the legislative conference committee that hashed out the final version of that bill pulled it out of the measure.
Its detractors argued its impact on creating jobs had never been evaluated in Georgia or proven effective elsewhere.
Their concerns appeared spot on late last year when the state released an audit declaring the jobs generated from the program’s initial round of funding didn’t come close to justifying the cost to the state in lost tax revenue.
State Sen. Chuck Hufstetler, RRome, who chairs the Senate Finance Committee, is opposed to the program. He said there are better ways to help small rural businesses — including Gov. Brian Kemp’s setaside of $40 million for direct loans.
“GARJA’s limited job creation claims have been called into question, and eight other states have tried and failed to implement similar deeply flawed programs,” said Danny Kanso, a senior tax and budget policy analyst with the Atlanta-based Georgia Budget and Policy Institute.
Rep. Matt Wilson, D-Brookhaven, who voted against the bill Tuesday, Feb. 22, said it makes no provision going forward for determining whether the second round of tax credits proves effective.
Most of the state’s counties were ineligible for the first round of program, and only 23 received any investment. In Northwest Georgia, only Polk, Haralson, Chattooga, Dade and Murray counties were eligible. None received investment.