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Georgia tax revenues spike, governor offers gas tax relief

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July 20, 2011

Georgia

By David Godow

ATLANTA, Georgia:

Recently cash-strapped Georgia got some heartening budgetary news this month as state officials announced a 7.8% jump in tax revenues for fiscal year 2011, which ended on June 30. Receipts jumped from $14.1 billion in fiscal 2010 to $15.3 billion in 2011, with most of the increase coming from sales, individual income and motor fuel taxes.[1] The uptick in revenues will come as a relief to the state's trimmed-down government, which saw $3 billion shaved off its budget in austerity measures earlier this year.

News of improved revenues may serve as a boon to Governor Nathan Deal, who has unsuccessfully pushed comprehensive state tax reform since his election last November. Deal campaigned on cutting taxes to create jobs, particularly the corporate income tax, and pushed Republican state legislators to nix new revenues in a tax reform proposal earlier this year. Deal succeeded in removing $1 per pack increase in the state's cigarette tax from the bill, which would have cut personal income tax rates but also raised new revenue by eliminating tax deductions and increasing taxes on car repairs, satellite televisions, and boat sales. The tax reform plan ultimately died in the House, but advocates have promised it will reappear in next year's legislative session.[2][3]

Meanwhile, Deal offered Georgians tax cuts by fiat in June when he issued an executive order ordering the state not to collect a 1.6 cent-per-gallon increase in the state's gas tax. That move could save taxpayers up to $40 million during the summer driving months.[4] It remains to be seen what role Deal will have in a resurrected tax reform plan during next year's legislative session, but it seems, in the meantime, he is continuing to burnish his tax-cutting credentials.

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