House Bill 1035, which would cut all tax credits and exemptions by 10%, could be called up for a vote in the Senate today.
House Bill 1035 passed the Senate Finance Committee last week and was made eligible this morning to be called up for a vote in the Senate today. It now includes language that would cut every Georgia tax credit and exemption by 10%. This bill was not vetted during the legislative process and is unworkable for a number of reasons. Therefore, the Metro Atlanta Chamber strongly opposes this bill.
As the state faces drastic budget decisions, we urge the Senate to continue prioritizing policies that will get our economy back on its feet, create jobs and maintain No. 1 business climate in the country—not raise taxes. A growing economy is the best way to revive our economy is to incentivize investment and a return to work. In April, the Metro Atlanta Chamber launched an initiative to RESTORE Georgia’s economy comprised of business leaders across the state. RESTORE made a number of recommendations to help rejuvenate Georgia’s economy, none of which called for cutting incentives that create jobs.
HB 1035 is a massive tax increase on Georgia citizens and companies, and will hurt our state’s effort to reduce unemployment and grow our economy. Tax exemptions and credits require periodic careful review, and HB 1035 rightly asserts that some are out of date, no longer relevant or serve no useful purpose. We should separate, however, these from the tax exemptions and credits that are proven to stimulate our economy. Efforts to increase tax revenues should avoid changes that could stymie the economic vitality of Georgia for years.
Many businesses invested in our state based on these tax policies. Companies looking to relocate, expand or startup in Georgia, will look elsewhere if we signal uncertainty in our business climate, as HB 1035 does.
While repealing or modifying exemptions and credits without meaningful public discussion or review is problematic, we want to highlight the following as particularly detrimental to our recovery:
Seniors: Senior citizens would see their taxes on retirement income go up.
Rural Hospitals: Donations to rural hospitals would be limited, and all hospitals would pay higher sales taxes.
Working Parents: Child care credits would be slashed, so working families would pay more for child care.
Foster Kids: Financial assistance for adopting foster children would be cut.
Military: National Guard members would pay more for life insurance when they are on active duty.
Disabled Adults: Charities serving developmentally disabled adults would pay higher taxes.
Schools: School systems would pay more for supplies used to provide free and reduced lunches.
Churches: Taxes on Bibles and other religious texts would rise.
Veterans: The cost of specialized vehicles provided to disabled veterans would go up.
Patients: Taxes on insulin, prescription drugs, oxygen, hearing aids, prosthetics, wheelchairs and eyeglasses would rise.
Hungry Families: Food banks and disaster relief organizations would pay higher sales taxes.
We know that businesses depend on a predicable environment. Creating a stable, reliable tax and regulatory framework in our state has paid tremendous dividends and sped up our recovery from the Great Recession in the last decade. It can and will do the same as we seek ways to bounce back from the pandemic recession.