The People’s Business: HB 1055

April 15, 2010

The legislature returned for another busy week and tackled many important issues facing our state. We have passed some good legislation this year and have made good progress on passing a balanced budget, which we hope to have finished soon. This has been a very challenging year. I am proud that we still have a citizen legislature here in Georgia. Our state legislature operates on one of the smallest budgets in the country when compared to other state legislatures. We are 48th in the country for legislative budgets and 50th per capita. That is something we should all be proud of as a state.
On the eve of national tax day, the Georgia General Assembly passed major tax relief with HB 1055, called by some the “Georgia Taxpayer Relief Act of 2010”. Under these difficult economic times, families need as much financial relief as possible and deserve a fair and honest tax system. This legislation eliminates taxes on all senior retirement income through a phase-out. Once fully enacted the tax cut is expected to be more than $250 Million per year. It also eliminates the state ad valorem property tax. This is a triumph for property owners, as the state will no longer be involved in taxing their property. The State of Georgia currently levies an ad valorem tax on all property, and is a component of local property tax bills. The state millage rate is a quarter mil (.25/$1,000 assessed value). Removing the state ad valorem tax will have no effect on counties, cities and school funding. The prohibition of the tax begins once the “rainy day fund” reaches $500 million.
Our state government provides many services to the public and uses fees to cover the cost of providing these services. Many of these fees have not been updated or evaluated in years. Some fees no longer cover the cost of providing the service and in other cases are no longer needed. HB1055 addresses this problem so that Georgia taxpayers will not have to subsidize services used by others because user fees are too low. Georgia’s fees are far lower than most states when compared to the rest of the country. For example, it costs $395 to file a lawsuit in Florida while it currently costs under $100 to do so in Georgia. This Legislation is good for taxpayers and ensures that we continue to provide important services to the public.
There are some services that taxpayers are currently footing the bill for that are being moved to a fee for service so that only the people using the service will now be paying for it. For example, we will impose a $150 fee for individuals appealing DUI license suspensions instead of the state covering the cost of these proceedings. That means that taxpayers will no longer have to pick up this cost. By implementing this new user fee, it will save taxpayers $3 million per year. We will also update some fines assessed by state agencies for violations. Many of these fines have not been updated in a number of years and are well-below Southeastern averages. Simply put, Georgia’s taxpayers will no longer be forced to subsidize services and activities for specific individuals or businesses because of this legislation. By addressing this issue now, users will rightfully pay the bulk of the cost of services provided.
Overall, the Georgia Taxpayer Relief Act of 2010 will provide relief for almost every taxpayer in Georgia while making significant progress in alleviating the state budget crisis. The House sent the FY 2011 budget to the Senate this week and the Senate is working over the next few days to pass a balanced budget that still supports the primary needs and services for all our citizens.