Lawmakers approve cuts to Georgia’s income tax rate but property tax plan tumbles 

Lawmakers signed off on a plan to forego more of the state’s income tax revenue, passing a tax cut bill late Thursday night over the concerns of Democrats who questioned the math used to support the cuts.  But a high-profile proposal focused on reining in rising property taxes only passed late Thursday night after being […]

Lawmakers signed off on a plan to forego more of the state’s income tax revenue, passing a tax cut bill late Thursday night over the concerns of Democrats who questioned the math used to support the cuts. 

But a high-profile proposal focused on reining in rising property taxes only passed late Thursday night after being dramatically scaled back. Thursday was sine die, the final day for bills to pass the Legislature.

Sen. Blake Tillery, a Vidalia Republican who chairs the Senate’s budget-writing committee, said the income tax bill that will make it to the governor’s desk does not go as far as Senate Republicans had wanted. An early Senate GOP proposal called for completely eliminating the state’s income tax by 2032. 

“It is not exactly what we wanted, but it moves this ball forward,” said Tillery, who is also a candidate for lieutenant governor. “Friends, we are not to stand here and allow perfect to be the enemy of good. We are here to move the ball forward for Georgians, to give them income tax relief during this time of high inflation, when gas, groceries and child care are costing them the most.” 

Lawmakers have agreed to accelerate a planned income tax cut that would bring the rate from 5.19% to 4.99%. The measure passed Thursday night also calls for more incremental cuts until the rate drops to 3.99%. 

It also gradually raises the standard deduction, so long as certain economic conditions are met, and makes the first $1,750 of tips and overtime tax-free. 

The bill also repeals several tax credits, though Tillery acknowledged that alone would not be enough to cover the billions of dollars of lost revenue from the tax cuts. The state’s income tax funds about half the state budget, which pays for health care, education, law enforcement and other services. 

Sen. Josh McLaurin, a Sandy Springs Democrat, argued that eliminating the tax credits would only cover a portion of the lost revenue created by the tax cuts. He called it a “completely fiscally irresponsible bill.” 

McLaurin, who is also a candidate for lieutenant governor, said Republicans in both chambers overpromised when it came to telling voters what kind of tax relief they were going to deliver this year. While Senate Republicans were pushing to eliminate the income tax, House Republicans were vowing to end local property taxes, which they equated to paying rent to the government. 

“Why is it that at 10 p.m. on sine die, we are doing this final got-to-go quick, slick maneuver? It’s because of the lies that were told by both the House and Senate on the types of tax cuts they were going to do. It was never possible,” he said. 

HB 463 passed the Senate with a 33-to-20 vote that fell mostly along party lines. 

Democrats who opposed the income tax cuts also argued it would disproportionately benefit wealthier Georgians. The bill cleared the House Thursday with a 104-to-71 vote, with some Democrats crossing over to vote with Republicans. 

“It would be the top earners in the state of Georgia that overwhelmingly benefit,” said Rep. Sam Park, a Lawrenceville Democrat who serves as the House minority whip. 

Republicans dismissed those concerns. 

“I think everybody gets a reduction commensurate with what they put in to fund government,” said Rep. Shaw Blackmon, a Bonaire Republican who chairs the House Ways and Means Committee and who sponsored the bill. 

Property taxes

House Republicans had originally floated a complicated plan that would eventually eliminate property taxes for homeowners, arguing that the intervention was needed because of the unsustainable trajectory of rising property taxes. 

House Speaker Jon Burns, a Newington Republican, called the proposal “historic” at a press conference in January. 

But such a sweeping change required a constitutional amendment, which needed a two-thirds vote – and support from enough Democrats. 

House Democrats opposed the more dramatic overhaul of property taxes over concerns that the changes would shift the tax burden to sales taxes and eat away at an important source of revenue for local governments and schools, and the original proposal failed in early March. 

A month later, a dialed-back version cleared the House but was still met with concerns. It passed the House earlier this week with a 98-to-68 vote. 

“Everybody shares in a sales tax, whether you’re from another country, another state or whatever,” Sen. Chuck Hufstetler, a Rome Republican who carried the bill in the Senate, told reporters earlier this week. “And I think it’s a much fairer way to do it. And our homeowners, again, I say when somebody’s had their property taxes increase 107% in one case in five years – who’s looking out for them?” 

But when the bill landed in the Senate late Thursday night, it failed with a 24-to-28 vote. Eight Republican senators voted against the bill. 

The proposal was revived through a legislative maneuver with some provisions dropped from the bill, shrinking the bill from 32 to 20 pages. House lawmakers agreed with the changes shortly before 1 a.m. Friday in what would be one of the chamber’s final votes of the year. 

Burns told reporters after lawmakers adjourned that he didn’t think the version the Senate sent back was “strong enough.”

“That’s something we’re going to continue to work on, because we’re not giving up,” Burns said. “We believe that Georgia taxpayers, Georgia homeowners, need and deserve some relief in their property taxes, and that’s something we’re committed to do.” 

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