A couple of years ago, I sponsored and passed Senate Resolution 222 which created the Senate Special Tax Exemption Study Committee. I was appointed to serve as chairman and members worked hard with the Department of Revenue, Senate Research, Pew Charitable Trusts, Chamber of Commerce and others to examine the costs, benefits and purpose of all current state tax exemptions.
The study committee submitted a report of findings and recommendations, including proposed legislation to assure we measure all exemptions regularly.
The committee held meetings throughout the state to properly and thoroughly give stakeholders, citizens and any interested parties opportunities to attend the meetings and provide input. It is our goal to ensure that each exemption has the potential for a Return on Investment (ROI). We worked hard to address any outdated exemptions that may hurt businesses while ensuring that exemptions that benefit Georgia’s economy and businesses, big and small, are properly utilized and promoted.
At the first meeting, Pew Charitable Trusts gave a presentation on how states are improving tax incentives for jobs and economic growth by providing tax exemptions. Some of their reasons for evaluating tax incentives state that “tax incentives are one of states’ primary economic development tools” while at the same time, “tax incentives collectively cost states billions of dollars per year.” It is the goal of the committee to find the proper balance between tax exemptions that drive economic growth and those that end up costing money.
We then broke up the current exemptions into a three-bucket system. First, we reviewed the exemptions that are working as a true tax incentive and could possibly be expanded. As an example, the film, television and digital entertainment tax exemption is working exactly as intended, if not even better. That year, former Gov. Nathan Deal announced that “Georgia-lensed feature film and television productions generated an economic impact of $9.5 billion during FY 2017. The 320 feature film and television productions shot in Georgia represent $2.7 billion in direct spending in the state.” This tax exemption shows what can happen when you invest a nickel to earn or save $100.
Second, we addressed tax exemptions that are preforming as intended but their true economic impact is unknown. We will measure their performance to ensure they are promoting economic growth, job creation and a true ROI.
Lastly, we analyzed tax exemptions that are not working as intended and are not providing a value to our state’s economy. The committee decided to sunset some of those in the 2018 legislative session, which passed overwhelmingly.
The work of this study committee is the first step for an effective evaluation of the numerous tax exemptions that are currently in place in Georgia. We must do all we can to ensure that we spend every tax dollar as wisely as we can. I have since sponsored legislation to assure a full business case is created and vetting independently for any new credit and all existing credits have a full analysis every five years. This is sound public policy to assure the peoples money is spent wisely.
State Sen. John Albers represents northern portions of Fulton County and southeastern portions of Cherokee County.
