The time is now; the need is acute; sponsors solicited and welcome -- In 2005 the Gen. Assembly needs to remove the sales tax exemption on groceries.
Do I heard the sound of drums? I thought I did. It is time to roll out "the" post.
In several past posts I have alluded to a forthcoming "the" post, the last being a 10-3-04 post on the proposed tuition increased that I concluded with the comment:
"And by the way, this adds to the excitement (for me anyway) about "the" post I have promised to make. I keep getting distracted by work (of all things), but it is coming, I promise. Again, stay tuned (and I want your help when it does come)."
Another that referred to it was a 9-26-04 post that stated:
"Sometimes it's unfunded mandates; other times it's Congress cutting taxes on the national level that will result in them going up -- or the states doing without -- on the state level (as in the removal of the credit for state death taxes that will be noted in "the" post coming in a few days)."
Another was in a 9-24-04 post entitled "Hopefully NIMBY-- Budget restraits to hit State Parks in Georgia," that reported:
"The Georgia Department of Natural Resources, which operates the parks, has said it may have to close some of them if the agency has to cut any more from its budget."
And finally, the first reference to this coming post was in a 9-22-04 post entitled "Be on the lookout for "the" post -- Corporate tax collections on the decline in Georgia." That post reported that corporate taxes collected by Georgia had plunged $300 million. The post stated:
"In fiscal 2004, which ended June 30, the state collected an unaudited $495 million in corporate income taxes compared with an audited $800 million five years earlier in 1999.
"Since 1999, collections have declined three out of five years.
"The $300 million decline is a small portion of the state's overall, $16 billion-plus budget, and Cagle is quick to add the legislature has no intention of boosting corporate tax collections at the expense of the state's business climate.
"But, he notes, "Three hundred million really makes a big difference when you're in tough fiscal times like we're in."
So at least you got a general idea of what "the" post was going to be about.
A shopping trip to learn the law:
Let’s go shopping in any Georgia county with a 1% SPLOST in effect, whether the local option sales tax is for your county, a municipality or the school district. I’ll make up the "grocery list."
If I asked you to note which items on my grocery list were subject to at least some sales tax, many of you would not score 100 I feel confident. But first let me make it a bit easier to get a higher score.
As you may or may not be aware, Georgia’s sales tax exemption for "food and beverages" does not apply to any 1% SPLOST. Put another way, Georgia’s statutory and constitutional provisions dealing with 1% SPLOST’s -- whether for counties, cities or school districts -- provide that the 1% tax imposed is applicable to the sale of food and beverages.
Thus I will simplify the situation; let’s just go shopping in a county without a 1% SPLOST in effect. As the following will demonstrate, the exemption for "food and beverages" is not as simple as it might appear.
The following would be subject to the regular sales tax, even though I am buying them at a grocery store:
Toiletries, napkins, laundry detergents, vitamins, pet food, alcohol, tobacco products, food which is hot at the point of sale (thus food which is cooked on-premises and kept warm will not be exempt, such as a grocery stores selling hot roasted chicken from a rotisserie), food sold in grocery stores to be eaten in the store (such as ice cream or soft drinks sold in open containers or through vending machines), etc.
The following would be exempt from the regular sales tax:
Staple food products for home consumption such as meat, poultry, fish, bread, cereals, milk, soft drinks, and infant formulas packaged for home consumption.
The Department of Revenue ("DOR") regulations say the purpose of the "food and beverages" exemption is to exempt from sales tax food purchased to be taken home, prepared and eaten. The general rule is that eligible food, sold to be eaten off-premises, qualifies for the exemption. Food sold to be eaten on-premises is not exempt.
Therefore, Georgia's regulations center on the type of food being sold and where the food is consumed.
Is this logical? It sounds likes governmental bureaucracy reins doesn’t it. It gets better.
To be understand the following, realize that eligible food (that is, food exempt from sales tax) is any food item which could be purchased with federal food stamps or WIC coupons.
And this is probably a good point to note that federal law conditions state participation in the food stamp program on the state exempting from sales taxes, purchases made with food stamps. For this reason -- generally speaking -- purchases made with food stamps have always been and will remain exempt from sales taxes.
Getting back to bureaucracy. The DOR has classified food dealers into three categories. The first category is food dealers or retailers which accept food stamps. The second category is food dealers which do not accept food stamps, but whose sales of eligible food comprise at least 50% staple items. The third category is for all other dealers including dealers which also serve the food on-premises.
Dealers in the first category (those who accept food stamps) have to keep separate records of eligible and ineligible food sales, but all sales of eligible foods will be presumed to be for off-premises consumption.
Dealers in the second category (those who do not accept food stamps) must show that 50% of their eligible food sales comprise staple products (that is, meats, breads, cereals, vegetables and dairy products). Once the retailer shows that 50% of eligible sales consist of staple products, then all eligible sales (as identified by the dealer) will be presumed to be for off-premises consumption.
Dealers in the first category, especially those with facilities for eating on-premises whose mix of eligible food sales do not fit into the second category, have the burden of maintaining records to show that the sale was for off-premises consumption. The DOR presumes that the sale was for on-premises consumption, and thus subject to the full tax unless the dealer can provide records to the contrary (that is, an item is sold "to go").
As an example, a grocery store sale of a dozen doughnuts will be presumed to be for off-premises consumption. A convenience store sale of a dozen doughnuts will likewise be presumed for off-premises consumption, but only if 50% of the store's eligible sales consist of staple products. A doughnut shop sale of a dozen doughnuts will be presumed for on-premises consumption unless the retailer keeps records indicating that the sale was for off-premises consumption.
I did not start out to make this the "food and beverages exemption 101," but you get the point. As stated above, the exemption for "food and beverages" is not as simple as it might appear.
General and Georgia’s current budget crisis:
I have no idea where Gov. Perdue or the legislature is headed with regard to budget matters for the upcoming legislative session.
Gov. Perdue took office in January 2003 facing a $600 million shortfall.
His report to agency heads in mid-August indicated that the state has slashed $1.7 billion since he took office.
Based on new data recently released from the state, despite state government taking in an additional $972 million in revenue next year, some services still may have to be cut or eliminated, the Governor says. The reason: Without changes, any increase in revenue will be eaten up by the rising cost of health care, education and employee payroll.
"No one seems to have a precise handle on any impending shortfall," writes Bill Shipp in a recent column, and "[i]f a comprehensive list of state priorities or a visionary plan for Georgia's future exists, we don't know about it. Neither do many legislative leaders."
So where are we going? I don’t know, but as alluded to above, probably the politicians don’t either.
My solution is an idea whose time has come, whether we like it or not. I do not see any other practical alternatives to the financial situation of our state that could pass without undue partisan quibbling. And for sure I have not heard about any being floated.
It is not one that I think should not be politicized.
This posting is not exhaustive, but is intended to generate discussion and get the ball rolling, and the sooner the better.
A brief history of Georgia’s sales tax and the exemption for groceries:
Over a half century ago then-Gov. Herman Talmadge had the legislature enact a 3% sales tax to finance across-the-board improvements in schools, highways and welfare and public health services. Along with the legislation came many exemptions, some from the outset and others such as for prescription drugs with subsequent legislation.
The general sales tax is an important source of revenue for the state, representing I think I have read some 35% or more of all state government tax revenue. I claim no accuracy whatsoever on this figure, but the role of this tax is significant, very significant.
In the nineties then-Gov. Zell Miller began a move toward tax relief by persuading the legislature to remove the sales tax on groceries. The legislation exempting the sale of groceries from sales taxes was phased in over several years, and was complete in 1998.
Thereafter Gov. Roy Barnes came along in 1999, and in the same spirit of tax relief for the masses, lowered property taxes and made it more difficult for local governments and school districts to raise them.
Throughout all of these administrations, even though we have needed to improve and go forward with ambitious transportation improvement plans, an increase in our state’s motor fuel tax -- one of the lowest motor fuel taxes in the nation and much of any increase which would be borne by non-Georgians -- has been on the untouchable list.
(I have reason to believe that this logical tax increase would have become a reality had Gov. Barnes been elected to a second term. Maybe not real early in his term with the economy down and gas prices on the rise, but during his term nonetheless.)
With Democrat Gov. Miller having lowered sales taxes by exempting groceries, Democrat Gov. Barnes having lowered property taxes, what in the world would Republican Perdue do in the way of proposing his own tax reductions.
As we remember, rather than continuing to please the masses, Gov. Perdue temporarily suffered amnesia and forgot them that brung him to the Gold Dome. Rather than cutting, his first major proposal involved raising taxes. And it wasn’t just going to be to get King Roy back by raising the property taxes that Barnes had cut.
The new governor also wanted to increase revenue for the state by reducing the consumption of taxable evil products.
(Say what Gov.? Easy, says he; I propose increasing taxes on cigarettes and liquor as a way to help balance the state budget and, at the same time, dissuade Georgians from buying alcohol and tobacco.)
Although we in South Georgian sure didn’t appreciate the Governor adding taxes to our cash crop tobacco as if our farmers didn’t already have problems enough from Washington, a compromise in Perdue’s proposed tax increase ultimately did prevail.
And for those that wanted the Governor to whack Medicaid, he has been there and done that, as we have read about those being forced out of nursing homes (by adopting spend-down provisions that are not federally mandated), and implementing an estate-recovery program that has been federally required for years, just not done. (The cries from this latter program will be much louder and its impact affect many more than the 1,700 involved in the spend-down provisions as the public comes to learn the details of the same.)
Although we have heard cries from the Democrats that the present administration is going forward with its plan "to deny health care to impoverished children and evict poverty-ridden old folks from nursing homes;" how its "proposed painful curtailment of health services to the disadvantaged seems to have been created with a meat ax act instead of a scalpel;" and that it is not sensitive to state government's highest duties is helping those who can't help themselves, do we also want to know the truth.
The truth is that if Gov. Perdue reversed these calls, the effect on the state budget would be rather minuscule.
And we can’t hide behind the donkey here either folks.
The rising cost of health care is not a new development during the Perdue administration. During his first term Gov. Barnes indicated that during his second administration, he planned to perform massive surgery on our state’s Medicaid program which was growing at twice the rate of the rest of the state budget. By his estimates, simply cutting the rate of Medicaid growth would solve Georgia’s entire budget problem.
And for those who advocated going after the state’s tax deadbeats, Perdue can lay claim to having been there and done that, with Revenue Commissioner Bart Graham even going after legislators and keeping a Georgia Tax Delinquent List current on the web.
And as noted above, additional revenues next year are not going to prevent further cuts, we are told, because without changes, any increase in revenue will be eaten up by the rising cost of health care, education and employee payroll.
Folks, the reality of the state of the state is that now health care and education costs make up 75% of the state budget, and are rising faster than tax collections, the latter being up somewhat as of late with the state’s improving economy.
Further education cuts, which are being passed to local school districts, will result in property tax increases. As a school board attorney watching such things, I have observed a shift where taxpayers seem to approve of such things as textbooks, computers and buses that were formerly financed by maintenance and operation funds (read "property taxes"), now routinely being included in SPLOST referendums, along with, of course, new or upgraded school facilities.
And we are aware of the school-funding suit filed recently (of which my school district is the largest system as previously discussed in a post) seeking to change the way education is funded. The implications of any possible changes in this area are enormous.
And one last you thing you probably haven’t heard about is going to make things worse for Georgia and other states (unlike this post, I will keep the explanation short and simple).
Part of President’s Bush’s tax reductions came at the expense of the states. We have been undergoing a phase out of something called the state death tax credit, but by 2005 it will be complete. Through fiscal year 2002 Georgia received in excess of $100 million from this source of revenue.
Unless the Gov. enacts a new Georgia estate tax -- not likely in my opinion -- next year Georgia will receive $-0- whereas just two years ago we were getting $100 million.
I recognize that with an overall state budget of some $16 billion, a loss of $100 million may not seem much. But just as Senator Everett Dirksen uttered his famous words about the U.S. government’s spending some thirty or so years ago: "A billion here, a billion there, and pretty soon you’re talking big money." The same things applies in Georgia when we are talking millions.
I am a Democrat, and consider myself a good Democrat (hopefully a better Democrat than a candidate for office). Thus I know the arguments for and against a regressive sales tax.
(And for those of you wanting to evict me from the Party for heresy for even discussing killing the sales tax exemption on groceries, much less advocating it, I find solace and can safely take refuge in having observed one thing. Like me or not, like my idea or not, you can’t kick me out of the Party, can they Zell?)
I have reviewed which states do and do not exempt groceries for home consumption by reviewing a study prepared by the Center on Budget and Policy Priorities.
So how much money are we talking about here if we killed the exemption that I wish Gov. Miller never had pioneered when times we better?
I am not sure. I saw a DOR press release in 1998 when the final 1 cent was going off. It said the complete elimination of state sales tax on groceries was estimated to be in the range of $550 million.
I have heard that now the figure may be around $865 million. For me the amount is not that important. This exemption is one that represents a situation where it is best to turn back the hands of time.
So where do we go from here:
One of my good friends and confidants in Douglas is Chuck Sims. Our family ties go back to the Middle Ages. Chuck also is our Representative in the Georgia House, and has been for eight years. He just won in an overwhelming vote of confidence, garnering 65% of the vote against a well–financed and former member of the Georgia Senate.
Chuck is with me on this one. Why don’t you email this post to your Representative and Senator. I will send it to Bobby Kahn and ask that he get it to be the Lt. Gov. I will also send it to some of our state constitutional officers.
Maybe it is an idea that will be discussed next week when the Gov. and the Board of Regents discuss the proposed mid-year tuition hike.
In several past posts I have alluded to a forthcoming "the" post, the last being a 10-3-04 post on the proposed tuition increased that I concluded with the comment:
"And by the way, this adds to the excitement (for me anyway) about "the" post I have promised to make. I keep getting distracted by work (of all things), but it is coming, I promise. Again, stay tuned (and I want your help when it does come)."
Another that referred to it was a 9-26-04 post that stated:
"Sometimes it's unfunded mandates; other times it's Congress cutting taxes on the national level that will result in them going up -- or the states doing without -- on the state level (as in the removal of the credit for state death taxes that will be noted in "the" post coming in a few days)."
Another was in a 9-24-04 post entitled "Hopefully NIMBY-- Budget restraits to hit State Parks in Georgia," that reported:
"The Georgia Department of Natural Resources, which operates the parks, has said it may have to close some of them if the agency has to cut any more from its budget."
And finally, the first reference to this coming post was in a 9-22-04 post entitled "Be on the lookout for "the" post -- Corporate tax collections on the decline in Georgia." That post reported that corporate taxes collected by Georgia had plunged $300 million. The post stated:
"In fiscal 2004, which ended June 30, the state collected an unaudited $495 million in corporate income taxes compared with an audited $800 million five years earlier in 1999.
"Since 1999, collections have declined three out of five years.
"The $300 million decline is a small portion of the state's overall, $16 billion-plus budget, and Cagle is quick to add the legislature has no intention of boosting corporate tax collections at the expense of the state's business climate.
"But, he notes, "Three hundred million really makes a big difference when you're in tough fiscal times like we're in."
So at least you got a general idea of what "the" post was going to be about.
A shopping trip to learn the law:
Let’s go shopping in any Georgia county with a 1% SPLOST in effect, whether the local option sales tax is for your county, a municipality or the school district. I’ll make up the "grocery list."
If I asked you to note which items on my grocery list were subject to at least some sales tax, many of you would not score 100 I feel confident. But first let me make it a bit easier to get a higher score.
As you may or may not be aware, Georgia’s sales tax exemption for "food and beverages" does not apply to any 1% SPLOST. Put another way, Georgia’s statutory and constitutional provisions dealing with 1% SPLOST’s -- whether for counties, cities or school districts -- provide that the 1% tax imposed is applicable to the sale of food and beverages.
Thus I will simplify the situation; let’s just go shopping in a county without a 1% SPLOST in effect. As the following will demonstrate, the exemption for "food and beverages" is not as simple as it might appear.
The following would be subject to the regular sales tax, even though I am buying them at a grocery store:
Toiletries, napkins, laundry detergents, vitamins, pet food, alcohol, tobacco products, food which is hot at the point of sale (thus food which is cooked on-premises and kept warm will not be exempt, such as a grocery stores selling hot roasted chicken from a rotisserie), food sold in grocery stores to be eaten in the store (such as ice cream or soft drinks sold in open containers or through vending machines), etc.
The following would be exempt from the regular sales tax:
Staple food products for home consumption such as meat, poultry, fish, bread, cereals, milk, soft drinks, and infant formulas packaged for home consumption.
The Department of Revenue ("DOR") regulations say the purpose of the "food and beverages" exemption is to exempt from sales tax food purchased to be taken home, prepared and eaten. The general rule is that eligible food, sold to be eaten off-premises, qualifies for the exemption. Food sold to be eaten on-premises is not exempt.
Therefore, Georgia's regulations center on the type of food being sold and where the food is consumed.
Is this logical? It sounds likes governmental bureaucracy reins doesn’t it. It gets better.
To be understand the following, realize that eligible food (that is, food exempt from sales tax) is any food item which could be purchased with federal food stamps or WIC coupons.
And this is probably a good point to note that federal law conditions state participation in the food stamp program on the state exempting from sales taxes, purchases made with food stamps. For this reason -- generally speaking -- purchases made with food stamps have always been and will remain exempt from sales taxes.
Getting back to bureaucracy. The DOR has classified food dealers into three categories. The first category is food dealers or retailers which accept food stamps. The second category is food dealers which do not accept food stamps, but whose sales of eligible food comprise at least 50% staple items. The third category is for all other dealers including dealers which also serve the food on-premises.
Dealers in the first category (those who accept food stamps) have to keep separate records of eligible and ineligible food sales, but all sales of eligible foods will be presumed to be for off-premises consumption.
Dealers in the second category (those who do not accept food stamps) must show that 50% of their eligible food sales comprise staple products (that is, meats, breads, cereals, vegetables and dairy products). Once the retailer shows that 50% of eligible sales consist of staple products, then all eligible sales (as identified by the dealer) will be presumed to be for off-premises consumption.
Dealers in the first category, especially those with facilities for eating on-premises whose mix of eligible food sales do not fit into the second category, have the burden of maintaining records to show that the sale was for off-premises consumption. The DOR presumes that the sale was for on-premises consumption, and thus subject to the full tax unless the dealer can provide records to the contrary (that is, an item is sold "to go").
As an example, a grocery store sale of a dozen doughnuts will be presumed to be for off-premises consumption. A convenience store sale of a dozen doughnuts will likewise be presumed for off-premises consumption, but only if 50% of the store's eligible sales consist of staple products. A doughnut shop sale of a dozen doughnuts will be presumed for on-premises consumption unless the retailer keeps records indicating that the sale was for off-premises consumption.
I did not start out to make this the "food and beverages exemption 101," but you get the point. As stated above, the exemption for "food and beverages" is not as simple as it might appear.
General and Georgia’s current budget crisis:
I have no idea where Gov. Perdue or the legislature is headed with regard to budget matters for the upcoming legislative session.
Gov. Perdue took office in January 2003 facing a $600 million shortfall.
His report to agency heads in mid-August indicated that the state has slashed $1.7 billion since he took office.
Based on new data recently released from the state, despite state government taking in an additional $972 million in revenue next year, some services still may have to be cut or eliminated, the Governor says. The reason: Without changes, any increase in revenue will be eaten up by the rising cost of health care, education and employee payroll.
"No one seems to have a precise handle on any impending shortfall," writes Bill Shipp in a recent column, and "[i]f a comprehensive list of state priorities or a visionary plan for Georgia's future exists, we don't know about it. Neither do many legislative leaders."
So where are we going? I don’t know, but as alluded to above, probably the politicians don’t either.
My solution is an idea whose time has come, whether we like it or not. I do not see any other practical alternatives to the financial situation of our state that could pass without undue partisan quibbling. And for sure I have not heard about any being floated.
It is not one that I think should not be politicized.
This posting is not exhaustive, but is intended to generate discussion and get the ball rolling, and the sooner the better.
A brief history of Georgia’s sales tax and the exemption for groceries:
Over a half century ago then-Gov. Herman Talmadge had the legislature enact a 3% sales tax to finance across-the-board improvements in schools, highways and welfare and public health services. Along with the legislation came many exemptions, some from the outset and others such as for prescription drugs with subsequent legislation.
The general sales tax is an important source of revenue for the state, representing I think I have read some 35% or more of all state government tax revenue. I claim no accuracy whatsoever on this figure, but the role of this tax is significant, very significant.
In the nineties then-Gov. Zell Miller began a move toward tax relief by persuading the legislature to remove the sales tax on groceries. The legislation exempting the sale of groceries from sales taxes was phased in over several years, and was complete in 1998.
Thereafter Gov. Roy Barnes came along in 1999, and in the same spirit of tax relief for the masses, lowered property taxes and made it more difficult for local governments and school districts to raise them.
Throughout all of these administrations, even though we have needed to improve and go forward with ambitious transportation improvement plans, an increase in our state’s motor fuel tax -- one of the lowest motor fuel taxes in the nation and much of any increase which would be borne by non-Georgians -- has been on the untouchable list.
(I have reason to believe that this logical tax increase would have become a reality had Gov. Barnes been elected to a second term. Maybe not real early in his term with the economy down and gas prices on the rise, but during his term nonetheless.)
With Democrat Gov. Miller having lowered sales taxes by exempting groceries, Democrat Gov. Barnes having lowered property taxes, what in the world would Republican Perdue do in the way of proposing his own tax reductions.
As we remember, rather than continuing to please the masses, Gov. Perdue temporarily suffered amnesia and forgot them that brung him to the Gold Dome. Rather than cutting, his first major proposal involved raising taxes. And it wasn’t just going to be to get King Roy back by raising the property taxes that Barnes had cut.
The new governor also wanted to increase revenue for the state by reducing the consumption of taxable evil products.
(Say what Gov.? Easy, says he; I propose increasing taxes on cigarettes and liquor as a way to help balance the state budget and, at the same time, dissuade Georgians from buying alcohol and tobacco.)
Although we in South Georgian sure didn’t appreciate the Governor adding taxes to our cash crop tobacco as if our farmers didn’t already have problems enough from Washington, a compromise in Perdue’s proposed tax increase ultimately did prevail.
And for those that wanted the Governor to whack Medicaid, he has been there and done that, as we have read about those being forced out of nursing homes (by adopting spend-down provisions that are not federally mandated), and implementing an estate-recovery program that has been federally required for years, just not done. (The cries from this latter program will be much louder and its impact affect many more than the 1,700 involved in the spend-down provisions as the public comes to learn the details of the same.)
Although we have heard cries from the Democrats that the present administration is going forward with its plan "to deny health care to impoverished children and evict poverty-ridden old folks from nursing homes;" how its "proposed painful curtailment of health services to the disadvantaged seems to have been created with a meat ax act instead of a scalpel;" and that it is not sensitive to state government's highest duties is helping those who can't help themselves, do we also want to know the truth.
The truth is that if Gov. Perdue reversed these calls, the effect on the state budget would be rather minuscule.
And we can’t hide behind the donkey here either folks.
The rising cost of health care is not a new development during the Perdue administration. During his first term Gov. Barnes indicated that during his second administration, he planned to perform massive surgery on our state’s Medicaid program which was growing at twice the rate of the rest of the state budget. By his estimates, simply cutting the rate of Medicaid growth would solve Georgia’s entire budget problem.
And for those who advocated going after the state’s tax deadbeats, Perdue can lay claim to having been there and done that, with Revenue Commissioner Bart Graham even going after legislators and keeping a Georgia Tax Delinquent List current on the web.
And as noted above, additional revenues next year are not going to prevent further cuts, we are told, because without changes, any increase in revenue will be eaten up by the rising cost of health care, education and employee payroll.
Folks, the reality of the state of the state is that now health care and education costs make up 75% of the state budget, and are rising faster than tax collections, the latter being up somewhat as of late with the state’s improving economy.
Further education cuts, which are being passed to local school districts, will result in property tax increases. As a school board attorney watching such things, I have observed a shift where taxpayers seem to approve of such things as textbooks, computers and buses that were formerly financed by maintenance and operation funds (read "property taxes"), now routinely being included in SPLOST referendums, along with, of course, new or upgraded school facilities.
And we are aware of the school-funding suit filed recently (of which my school district is the largest system as previously discussed in a post) seeking to change the way education is funded. The implications of any possible changes in this area are enormous.
And one last you thing you probably haven’t heard about is going to make things worse for Georgia and other states (unlike this post, I will keep the explanation short and simple).
Part of President’s Bush’s tax reductions came at the expense of the states. We have been undergoing a phase out of something called the state death tax credit, but by 2005 it will be complete. Through fiscal year 2002 Georgia received in excess of $100 million from this source of revenue.
Unless the Gov. enacts a new Georgia estate tax -- not likely in my opinion -- next year Georgia will receive $-0- whereas just two years ago we were getting $100 million.
I recognize that with an overall state budget of some $16 billion, a loss of $100 million may not seem much. But just as Senator Everett Dirksen uttered his famous words about the U.S. government’s spending some thirty or so years ago: "A billion here, a billion there, and pretty soon you’re talking big money." The same things applies in Georgia when we are talking millions.
I am a Democrat, and consider myself a good Democrat (hopefully a better Democrat than a candidate for office). Thus I know the arguments for and against a regressive sales tax.
(And for those of you wanting to evict me from the Party for heresy for even discussing killing the sales tax exemption on groceries, much less advocating it, I find solace and can safely take refuge in having observed one thing. Like me or not, like my idea or not, you can’t kick me out of the Party, can they Zell?)
I have reviewed which states do and do not exempt groceries for home consumption by reviewing a study prepared by the Center on Budget and Policy Priorities.
So how much money are we talking about here if we killed the exemption that I wish Gov. Miller never had pioneered when times we better?
I am not sure. I saw a DOR press release in 1998 when the final 1 cent was going off. It said the complete elimination of state sales tax on groceries was estimated to be in the range of $550 million.
I have heard that now the figure may be around $865 million. For me the amount is not that important. This exemption is one that represents a situation where it is best to turn back the hands of time.
So where do we go from here:
One of my good friends and confidants in Douglas is Chuck Sims. Our family ties go back to the Middle Ages. Chuck also is our Representative in the Georgia House, and has been for eight years. He just won in an overwhelming vote of confidence, garnering 65% of the vote against a well–financed and former member of the Georgia Senate.
Chuck is with me on this one. Why don’t you email this post to your Representative and Senator. I will send it to Bobby Kahn and ask that he get it to be the Lt. Gov. I will also send it to some of our state constitutional officers.
Maybe it is an idea that will be discussed next week when the Gov. and the Board of Regents discuss the proposed mid-year tuition hike.
posted by Sid Cottingham | 7:20 PM
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