On Monday, March 19th, we returned to the Gold Dome to begin our 34th legislative day of the 2012 session.  A number of pieces of Legislation passed the House this week but two were major pieces of legislation that will reform both our state’s tax code and criminal justice system.

HB386, called the “Georgia Jobs and Family Tax Reform Plan,” does a number of things to create a more attractive business climate, reduce the marriage penalty, and replace the sales and ad valorem taxes on automobiles sales with a one-time title tax.

A brief description of some of the key components of this plan are as follows:

Eliminates the state sales tax on energy used in manufacturing: Members of both the Tax Reform Council and the Governor’s Competitiveness Initiative recommended that we exempt energy used in manufacturing. We are one of only 10 states that tax energy used in manufacturing. This initiative will help the state attract more companies like Caterpillar which just announced that it will be creating more than 1,400 more jobs for Georgians with a new plant they are building. This tax cut will be phased in over a four year period and when fully implemented will save Georgia manufacturers approximately $150 million per year. Gwinnett is home to more than 800 manufacturing firms which employ more than 20,000 workers. This legislation will directly impact our local community.

Eliminates the “birthday tax” on motor vehicles: When you title a car in Georgia after March 1, 2013 you will pay a one-time title fee instead of annual ad valorem taxes, due on your birthday every year and also avoid the sales tax due at the time of your vehicle’s purchase. The one time title fee rate of 6.5 to 7 percent, is less than/equal to the sales tax in most counties. Transfers between immediate family members will only be subject to one-half of 1 percent.

Reduces the marriage penalty in our income tax code by cutting income taxes for married couples: Cuts income taxes by $140 million every year by increasing the personal exemption for married couples by $2,000 per couple from $5400 to $7400.

Caps retirement income exclusion for seniors at current level of $65,000 ($130,000 per couple): This will NOT be a tax increase for anyone taking the exclusion now. This will just freeze the exclusion at current levels.

Provides a two-year sales tax holiday for school supplies and energy and water efficient products. This cuts sales tax by roughly $80 million over the next two years for Georgia consumers and keeps Georgia businesses competitive with counterparts in neighboring states.

Creates a one percent sales tax exemption on commercial aviation fuel to make our fuel rates more competitive with other major airports. Currently Georgia’s aviation fuel tax is the highest in the nation. This cut will help “fuel” growth in the logistics industry as we become more competitive with surrounding states.

Revises sales tax exemptions on agriculture to ensure fairness and consistency across Georgia’s largest industry. The agriculture exemptions have been cobbled together over the years and are not consistent. Currently for example, energy used to heart and cool poultry houses is exempt, but not energy used in other livestock facilities like dairy and swine. It also includes broad agriculture input exemptions for energy, machinery and equipment and other inputs like seed, fertilizers and insecticides. This will save our agricultural producers about $17 million per year.

E-Fairness: Currently, all retail sales to Georgians, be they online or in store, are required to result in the collection and remittance of either a state sales or use tax. While brick and mortar retailers within the state must collect a sales tax at the time of the sale, their out-of-state counterparts do not. Instead, this burden is placed on their Georgia customers, who are required to remit the sales tax in the form of use tax, something many Georgians are not aware of even though it has been law since the 1950’s. HB 386 would end this disparate treatment that unfairly burdens in-state retailers by requiring out-of-state sellers to also collect and pay the Georgia state sales tax if they have certain relationships with affiliates in Georgia, just like their in-state counterparts. Not only will this end an unfair tax policy that puts small businesses in Georgia at a disadvantage, but it will also stop incentivizing out-of-state retailers to keep their facilities and jobs out of Georgia. As we work towards a fair tax in Georgia it is essential that businesses in our state are able to compete fairly across the board.

HB1176 is the result of a Study Committee on Criminal Justice Reform. Since 1990, Georgia’s prison population has more than doubled to nearly 56,000 inmates, costing the state over $1 billion annually.

Despite this growth, Georgia taxpayers have not received a sufficient public safety return on their corrections dollars.  In fact, our recidivism rate – the proportion of inmates who are reconvicted within three years of release – has held steady at nearly 30 percent for the past decade.

Aware of the problems in Georgia’s criminal justice system, the Georgia Supreme Court, Governor Deal, and the Georgia General Assembly worked together last year to create the Special Council on Criminal Justice Reform for Georgians.  This bi-partisan council conducted an in-depth analysis of the state’s sentencing and corrections data to determine how the state can better utilize taxpayers’ dollars in keeping dangerous criminals off the street.

The council found that 60 percent of all prison admissions were drug and property offenders, many of which committed non-violent crimes and had never been to prison before. With each of these offenders costing the state $49 a day in prison, it became apparent that other community-based options, such as Day Reporting Centers that cost $16 a day per offender, might be a more efficient and cost-effective method for supervising non-violent offenders. This is especially true when you consider the fact that our prisons are filled with drug addicts caught in a cycle of petty crime to support their habit followed by short stints in prison where rehabilitation is not offered. Rather than perpetuate this perpetual problem, we could break the cycle through low cost community-based rehabilitation. Unfortunately, few judges in our state currently have viable sentencing options other than prison.

To change this, HB1176 would concentrate prison space on violent and career criminals by enhancing penalties for some serious offenders and more effectively punishing low-level drug users and property offenders. It also creates tougher, more effective probation supervision; improves community-based sentencing options, such as accountability courts, that reduce recidivism; and holds agencies accountable for better results through data collection and performance measurement systems. This bill will NOT reduce the sentences for any serious violent felonies or decriminalize or legalize any controlled substance.

The reforms implemented by HB1176 will truly allow Georgians to rest assured that their tax dollars are being spent on an efficient criminal justice system without sacrificing public safety. By redirecting some of the money we spend incarcerating low-risk, non-violent offenders with substance abuse problems toward more effective community-based options that cost less and produce better outcomes, we will make all of Georgia’s communities safer. Moreover, the measures included in this legislation will save taxpayers an estimated $264 million by averting projected growth in prison costs over the next five years.

The House is in session Monday, Tuesday, and Thursday next week with Thursday being the final day, or Sine Die, of the 2012 Legislative session.

You’re my boss and I work for you. If you have questions or concerns, please do not hesitate to contact me. You can reach me at my Capitol office (404) 656-0325 or cell (404) 723-8989.

Sincerely,

Josh Clark

State Representative, District 98

612-E Coverdell Legislative Office Building

18 Capitol Square

Atlanta, GA 30334

O. 404-656-0325

C. 404-723-8989

www.votejoshclark.com

Assistant: ReJenia.Ford@house.ga.gov

 “Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has” – Margaret Mead