Monday, March 2, 2009

GBPI: Senate to Consider Bipartisan Tax Transparency Bill

The Senate Appropriations Committee will take up Senate Bill (SB) 206, introduced by Senator Greg Goggans, Chair of the Community Health Appropriations Subcommittee, on Tuesday March 3rd.

The bill would require a regular accounting of tax breaks to bring more transparency and accountability into tax decisions. Bill cosponsors include Senate President Pro Tem Tommie Williams, Senate Majority Leader Chip Rogers, Appropriations Chair Jack Hill, Senate Minority Caucus Chair Tim Golden, and Senator Bill Cowsert, the Governor's floor leader.
"Over the past six years the Senate has taken the lead in budget transparency and accountability," said Sen. Goggans (R-Douglas). "For too long we've been operating in the dark in regards to tax policy. As with budget decisions, it is time that our tax decisions are accountable to citizens."

SB 206 requires that tax expenditures are made known, benefiting not only the public, but lawmakers who until now have not known the cost and effectiveness of tax preferences passed over the years. Tax expenditures grant special tax relief designed to encourage certain kinds of taxpayer behavior or to aid taxpayers in special circumstances. Expenditures help either a particular business, industry, or group of people by exempting them from a class of taxes or by providing credits, which in turn directly reduces state revenues.

"We made significant progress in budget transparency last year in passing Senate Bill 300," said Senator Rogers (R-Woodstock). "Good government demands transparency in budgeting, but also in taxing. As stewards of the public's money we need this information to understand the ramifications on all taxpayers of particular tax choices."

As Georgia faces a $2.5 billion budget deficit and staggering unemployment rates, this bill provides opportunities to review tax relief provisions and understand financial ramifications of existing and proposed expenditures. Currently only budget items face annual scrutiny and performance measures, although tax expenditures have the same potential to impact revenue.

"As Georgia decides how to respond to its growing needs, all sources of spending must be on the table, and lawmakers must assure Georgians that tax expenditures on the books today make sense for Georgia during a recession and into the future," said Senator Golden (D-Valdosta).

The tax expenditure report proposed in SB 206 is recommended by Georgia Budget and Policy Institute (GBPI), Georgia Department of Audits and Accounts, and Pew Center of the States, which measures states' performance and management. Thirty-nine states have such transparency.

"The bipartisan support for SB 206 shows that the principles of good government are held by both political parties," said Alan Essig, executive director of GBPI. "Although there may be honorable disagreements over policy, there is agreement that policy decisions should be made based on accurate and timely information. SB 206 gives policy makers such information."

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