ATLANTA – Volvo Cars and other industrial prospects shouldn’t be afraid of losing tax breaks as political retribution just because Delta Air Lines lost its fuel sales-tax exemption, Gov. Nathan Deal said Wednesday.
Georgia is competing with South Carolina as the two finalists for Volvo’s first American assembly plant, budgeted at $500 million. As the state was wooing the carmaker this spring, the legislature stripped the airline’s exemption at the suggestion of a Rep. Earl Ehrhart, R-Sandy Springs, who urged his colleagues to make an example of CEO Richard Anderson who headed the Metro Atlanta Chamber of Commerce that called for raising taxes for road improvements.
“It’s been said that we need to step up and tax individuals in our district for transportation,” Ehrhart said in a subcommittee. “After you.”
But some observers have said the move was to punish the company for lobbying against the controversial religious liberty bill and for immigration reform, angering conservative legislative leaders.
Other multinational CEOs have reportedly pointed to Delta’s plight as a warning for doing business in Georgia.
When asked about it after his speech at the Atlanta Press Club, Deal said that was the wrong characterization. Instead of thumping the airline, the legislature was merely withdrawing a helping hand extended 10 years ago when the company faced bankruptcy.
“The legislature took that one cent off to try to help Delta, but when you’re making billions of dollars in profit, you’re not in that same category,” he said. “To simply restore it in the good times and take it away in the hard times, I think that is not punitive. That is one of the things that the state has authority to do.”
The tax was restored as part of a transportation-funding bill that is awaiting Deal’s signature. During the years that the tax was not in place, the federal government ruled that money from the tax must be used to maintain airports and can no longer go toward other government functions like education or healthcare.
Deal said he plans to release a list soon of the airports around the state that will see some of that money.
Regarding competition with South Carolina for Volvo, the governor said Georgia had much going for it, including its environmental stewardship. He was referring to the gopher tortoise habitat located on the 1,900-acre Bryan County site the company is considering.
The Georgia state reptile is endangered in many states but not here because, he said, Peach State agencies took steps years ago to protect it, including legislation last year to prohibit recreational hunting of snakes in tortoise holes.
“That is considered environmentally friendly, and because of that, the gopher tortoise is not on the endangered list in Georgia because we’ve been responsible,” he said.
The governor said his fingers are crossed about Volvo’s decision but wouldn’t say when he hoped to hear it.