During the 2017 Legislative Session, I sponsored Senate Resolution 222, which created the Senate Special Tax Exemption Study Committee. I was appointed by Lt. Governor Casey Cagle to serve as chairman of the six member committee. Members of the study committee are working hard with the Department of Revenue, Senate Research, Pew Charitable Trusts and others to examine the costs, benefits and purpose of all current state tax exemptions. The study committee is responsible for submitting a report of findings and recommendations, including proposed legislation, by December 1, 2017.The committee is holding meetings throughout the state to properly and thoroughly give stakeholders, citizens and any interested parties opportunities to attend the meetings and provide input. It is our goal to ensure that each exemption has the potential for a return on investment (ROI). We will work hard to address any outdated exemptions that may hurt businesses while ensuring that exemptions that benefit Georgia’s economy and businesses, big and small, are properly utilized and promoted.
At the first meeting, Pew Charitable Trusts gave a presentation on how states are improving tax incentives for jobs and economic growth by providing tax exemptions. Some of their reasons for evaluating tax incentives are that, “tax incentives are one of states’ primary economic development tools;” while at the same time, “Tax incentives collectively cost states billions of dollars per year.” It is the goal of the committee to find the proper balance between tax exemptions that drive economic growth and those that end up costing money.
We plan to break up the current exemptions into a three-bucket system. First, we will review the exemptions that are working as true tax incentives and could possibly be expanded. As an example, the film, television and digital entertainment tax exemption is working exactly as intended, if not even better. This past July, Governor Nathan Deal announced that, “Georgia-lensed feature film and television productions generated an economic impact of $9.5 billion during FY 2017. The 320 feature film and television productions shot in Georgia represent $2.7 billion in direct spending in the state.” This tax exemption shows what can happen when you invest a nickel to earn or save $100.
Second, we will address tax exemptions that are performing as intended but their true economic impact is unknown. We will measure their performance to ensure they are promoting economic growth, job creation and a true ROI.
Lastly, we will analyze tax exemptions that are not working as intended and are not providing a value to our state’s economy. The committee will discuss whether it would make sense to sunset some of those.
The work of this study committee is the first step for an effective evaluation of the numerous tax exemptions that are currently in place in Georgia. We must do all we can to ensure that we spend each and every tax dollar as wisely as we can.