When it comes to state income taxes, Georgia competes in a low-tax region.
With the rapid post-pandemic rise in telework agreements that allow employees to work from home, states now more than ever compete to attract and retain workers—especially high-earners—with tax incentives, improved economic conditions, and a better quality of life. Georgia has been playing some of that game from behind. But it doesn’t have to.
Like other states, Georgia benefitted from federal stimulus during the COVID-19 years, and its coffers now enjoy strong surpluses. The state’s Revenue Shortfall Reserve Fund boasts more than $5 billion. And the treasury holds another $10 billion-plus in undesignated reserves. Those excess funds give Georgia options and flexibility to pursue tax reforms that will make the state more economically competitive.
The significant tax reforms enacted in 2022 were a good start. Those reforms made Georgia a flat-tax state with a 5.49% income tax on all earners, and the rate is scheduled to drop gradually to 4.99% by 2029. Lawmakers also raised the standard tax deductions for single and married filers and eliminated federal tax deductions. Responsible new tax reforms can put Georgia’s surpluses to work and do even better.
The new report, “Next Steps for Tax Reform in Georgia,” which we co-published with the Buckeye Institute, takes a look at how Georgia can continue on the path of lower taxes, while maximizing economic growth for the state. We hope you will check it out, along with the latest news and analysis from the last week, including:
- House adopts narrow Certificate of Need reform bill
- Hyundai plant moves up start of production
- Residents will soon vote on incorporating new city in northern Gwinnett
- Home prices hit new record in December
Also, do you know a college student who would be interested in an internship with Georgia Public Policy Foundation? We are looking for marketing interns for a paid internship this summer. You can get more details here.
– Kyle Wingfield
Friday’s Freshest
Parents, educators and taxpayers deserve to know school accountability ratings
A series of maneuvers over the past few years led to less information for parents, educators and taxpayers about how their schools are performing. This culminated last fall when the Biden administration granted the Georgia Department of Education’s request to stop publishing the single scores, on a familiar 0-100 scale, which federal law requires for local districts and individual schools.
Georgia Public Policy Foundation publishes College and Career Ready Performance Index overall scores
The Foundation has made available College and Career Ready Performance Index scores for every school and district in the state, along with historical data to compare the numbers to 2019.
Georgia Public Policy Foundation participates in Hispanic Day at the State Capitol
As a Latina who works for the Georgia Public Policy Foundation, we are seeking to explain the importance of economic and educational freedom to all minority constituents. Recently, we launched a targeted presentation titled, “The Hispanic Parent Empowerment Tour.”
Metro Atlanta’s population to reach 7.9 million by 2050
The Atlanta Regional Commission is forecasting a growth of 1.8 million people in the 21 county region around Atlanta, while its share of the state population would grow from 57% to 59%.
A recycling center that actually produces waste
Members of the FBI are investigating a stalled recycling center in Lamar County. As reported last month by FOX 5 Atlanta, the Lamar County Regional Solid Waste Management Authority took out a $27.5 million state loan 10 years ago to build a waste-to-fuel project at the landfill. The project is now more than six years past its original completion date. Loan repayments are scheduled to start in April.
At the Capitol: Week of February 26
Crossover Day has finally arrived as we found out which proposed bills moved on to the other chamber. While not quite as spectacular as the rush to the finish line we’ll see on Sine Die, this week had some interesting developments:
- Another week, and another long-time legislator announces retirement. Senate Minority Leader Gloria Butler, D-Stone Mountain, said she would not seek re-election for a 14th term. Butler has served in the Senate since 1999.
- The impacts of Georgia’s Certificate of Need (CON) regulations have been a legislative priority, as well as a topic covered extensively by the Foundation, for years now. The House finally passed a narrow version of CON reform with HB 1339. While this bill, sponsored by Rep. Butch Parrish, R-Swainsboro, would remove certain CON regulations, it preserves them in most other circumstances. It should be noted that this approach is much less expansive than what last year’s Senate Study Committee on CON recommended.
- After last week’s narrow passage out of the Senate Education and Youth Committee, the “Boundless Opportunities for Georgians Act” passed the Senate on Tuesday by a vote of 38-14. SB 147 was authored by Sen. Shawn Still, R-Nrocross, and it seeks to improve inter-district transfers for K-12 students.
- On Tuesday, the Senate approved a resolution to amend the state constitution to allow for sports betting in Georgia. This measure now needs two-thirds of the House vote before it would go to the ballot in November.
- A contentious vote in the Senate ultimately saw the passage of the “Georgia Consumer Privacy Protection Act.” SB 473, from Sen. John Albers, R-Roswell, aims to provide protections for consumers’ personal data online.
- HB 971, the “Firearm Safe Handling and Secure Storage Tax Credit Act,” overwhelmingly passed the House on Tuesday. This would allow Georgians who purchase a gun safe or enroll in firearm safety training to claim up to $300 in income tax credits. The bill was sponsored by Rep. Mark Newton, R-Augusta.
- For the second year in a row, the effort to allow craft brewers to sell directly to consumers has failed. The Senate Regulated Industries Committee did not advance SB 163, authored by Sen. Chuck Hufstetler, R-Rome, after a Feb. 6 hearing.
In The News
Georgia schools chief, state lawmakers at odds over proposed performance rating system (Georgia Recorder)
Last year’s single scores are available, albeit unofficially. The Georgia Public Policy Foundation, a right-leaning think tank, calculated and published scores for schools, grade clusters and districts on its website. President and CEO Kyle Wingfield said the calculations were done with the same formula used in 2018 and 2019, the most recent years with complete data, to make the scores comparable. “Real transparency means information that’s clear and meaningful, not requiring the public to be experts themselves to know what their government is doing,” Wingfield said.
House considers bill for a big income tax break (Atlanta Journal Constitution)
The vote Wednesday came shortly after Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, a conservative think tank, made just such a suggestion to the committee. “How the state raises its money does matter,” Wingfield said. “Generally, the private sector will spend money more productively than the public sector.”
Translated: Giving people more money to spend is better for the economy than letting the government spend it, according to Wingfield. He said lower income taxes would boost Georgia’s economy, which is the message House Republicans on the Ways and Means Committee wanted to hear.
The Latest
Economy
PSC to resume hearings on Georgia Power request for more generating capacity
The Georgia Public Service Commission will hold a second round of hearings February 29 and March 1 on Georgia Power’s request for 6,600 megawatts of additional capacity, up from just 400 megawatts the company forecast it needed two years ago. Georgia Power executives attribute the anticipated huge increase in demand for electricity to unprecedented economic growth in the Peach State.
Hyundai Motor Group Metaplant America moves up start of production
Hyundai Motor Group Metaplant America announced this week that the Ellabell plant would start production in the fourth quarter of 2024 rather than the first quarter of 2025, as originally projected. Hyundai’s press release stated, “The official start of production has accelerated to the fourth quarter of 2024 with the grand opening celebration targeted for the first quarter of 2025.”
Connecting the billion-dollar dots to NW Georgia’s boom
In three contiguous counties — Floyd, Bartow and Polk — we’re counting more than $9 billion in investments and 6,000 additional jobs. Construction is well underway on most of it with production due later this year and in 2025. But what comes next is even more critical. From government to business to healthcare to education, the time to plan for tomorrow is today.
Government accountability
Proposed short-term rental ordinance on Tybee Island moves forward
A controversial Tybee Island short-term rental ordinance is moving forward despite concerns from property owners. More than 20 property owners spoke during the most recent city council meeting with most of them against the proposed new ordinance, saying it stripped them of their property rights.
Northeast Gwinnett residents face big decision on area’s future in cityhood vote
With Gov. Brian Kemp’s recent signing of Senate Bill 333, which calls for a referendum on incorporating a city of Mulberry, it will now be up to voters to decide what happens next. If the “Yes” votes come out on top, Mulberry will become Gwinnett County’s 17th city. It will also be the largest city in the county by geographic size and the second largest in terms of population, with about 41,000 people living inside the proposed city limits.
Georgia to spend $392M for Capitol overhaul, new legislative offices
Georgia’s lawmakers are moving not only to rebuild the iconic dome on the state Capitol, but the entire complex. Lawmakers this week agreed to spend $392 million to build a new legislative office building for themselves and to renovate the 1889 Capitol building.
Housing
With Fetzer Lakes development withdrawn, Pembroke city manager addresses housing needs, options
In mid-February, developer James Dasher of Fetzer Lakes LLC withdrew his application for the rezoning and annexation of land that would have ultimately produced hundreds of homes in Pembroke. However, with Hyundai Motor Group Metaplant America expected to have more than 8,000 employees by 2031, an increase in housing in the Pembroke area seems inevitable.
Home prices hit a new all-time high in December
Home prices rose for the 11th consecutive month in December, as housing inventory remained painfully low. Prices increased 5.5% nationally in December when compared with the previous year, the S&P CoreLogic Case-Shiller index showed. That is up from the 5% annual increase recorded the prior month.
Transportation
Sandy Springs embarks on 2-year-long improvement project on busy roads
The Sandy Springs City Council approved a construction contract for a new road project beginning this week in Sandy Springs. The city posted on Twitter last week that the “project years in the making” would kick off highway improvements for Johnson Ferry Road and Mt. Vernon Highway this week.
I-575 area transportation plan will bring change to Cherokee
Cherokee County leaders have hired a firm to develop a transportation plan for the Interstate 575 and Sixes Road interchange area. The area plan will include land use and transportation land components, with a goal of analyzing, developing and recommending “a wide array of major and minor transportation improvement projects for the interchange area,” according to county documents.
Bonus
On taxes and economic freedom, Canadians have it worse than Americans
It’s late February, a time of year when many Americans contemplate stacks of documents and receipts, dreading the moment when they’ll have to square accounts with government extortionists. That this comes as the state grows increasingly intrusive and coercive adds insult to injury, since we pay the bill for this mistreatment. But it could be worse; we could be Canadian!
UGA announces $7.3 million in campus security enhancements in wake of Laken Riley’s death
The University of Georgia announced the addition of $7.3 million in new campus safety measures that come in the wake of the violent slaying of Athens nursing student Laken Riley. The 22-year-old on Thursday was running on a trail at UGA’s intramural fields off College Station Road when police said she was attacked and killed by Jose Antonio Ibarra, 26, an undocumented Venezuelan immigrant living in Athens.
More people live alone in Atlanta than almost any other U.S. city
Living alone is more common than ever for Americans, and the trend is only going up. According to a recent Chamber of Commerce report, Atlanta now ranks fourth among major U.S. cities for this living arrangement. In Atlanta, 24% of males live alone, as do 29.3% of females.
Quotes of the Week
“New ideas pass through three periods: 1) It can’t be done. 2) It probably can be done but it’s not worth doing. 3) I knew it was a good idea all along!” – Arthur C. Clarke
“The American Constitution was not written to protect criminals; it was written to protect the government from becoming criminals.” – Lenny Bruce
“Education is simply the soul of a society as it passes from one generation to another.” – G.K. Chesterton