We have noted before the General Assem-bly’s fondness for giving tax breaks and other financial gifts to corporations and special interest groups. It’s something they do with a passion and the state treasury, as a result, loses more than $1 billion in revenue annually.
Whenever these tax giveaways have been debated in recent years, the sponsors of the bills invariably made the same claim in arguing for passage: Business tax cuts will create jobs.
When a billion-dollar tax break for corporations was being debated in the Senate in 2005, Casey Cagle, then a senator from Gainesville, said, “It’s pro-jobs legislation. It will ensure we have jobs for the future.”
“It’s about jobs, jobs and jobs,” said Rep. Ron Stephens (R-Savannah).
And so our elected leaders granted tax breaks and financial gifts to entities such as Delta Air Lines, Coca-Cola, Georgia Power, Gulfstream, Aflac and other corporations that can afford to spend lots of money on well-heeled lobbyists.
But you know, it’s funny how things work out. All of those new jobs that were supposedly going to be generated by this gusher of business tax breaks don’t seem to have materialized.
Georgia has suffered from a higher than average unemployment since 2005, culminating in February, when the jobless rate hit the highest level ever in Georgia at 9.3 percent. How could that be happening when all of those tax cuts were going to create so many jobs?
If you look at Labor Department data, you’ll see that in the 50 months since January 2005, which was when Republicans assumed control of the Legislature, Georgia’s unemployment rate has been higher than the national rate for 28 of those months.
To be fair, most of the current job losses can be blamed on the nation’s economic recession. Every state is losing jobs and Georgia is certainly no exception. But our unemployment rate has been higher than the national rate, sometimes by a substantial margin, for 16 consecutive months, dating back to before the current downturn began. If all those tax cuts are going to create new jobs, shouldn’t Georgia at least be undercutting the national average?
“When it comes to reviving the economy, tax cuts do not work as well as smart public spending,” wrote Lawrence Mishel, president of the Economic Policy Institute in Washington.
Throughout the administrations of Zell Miller, Roy Barnes and Sonny Perdue, lawmakers have made the conscious choice that it’s better to cut taxes than retain the money for state purposes. What if legislators had chosen to not hand out all those tax cuts and had used the revenues instead to provide more services?
With all of that extra revenue available, the General Assembly might have been able to give local school systems their full share of QBE formula funding. School boards could have protected current jobs because they would not have had to lay off as many people and they might even have been able to hire additional teachers – the kind of job that pays much better than a hamburger flipper or a Walmart greeter.
Who knows? The additional teachers and support staff might even have helped our children learn a little more. We’ll never know.
The Legislature could also have provided more Medicaid funding for hospitals had it not handed out so many tax gifts. This would have allowed the state to provide more medical care to low-income families that can’t afford health insurance. By pumping more money into the hospital system, it might also have prevented hospital closures and the layoffs of nurses and other healthcare professionals. Not to belabor the point, but these are the kinds of jobs that pay better than McDonald’s and also provide urgently needed medical care for those least able to pay for it.
Without all those tax breaks, there could also have been more money available to spend on repairing and building highways – a shot in the arm to one of our largest employers, the construction industry. Does anyone want to argue that our transportation system is so up-to-date it doesn’t need improvements?
Instead, our elected leaders made bad choices by handing out tax breaks that don’t create jobs, rather than use the money where it might have made a difference.
Georgia is suffering from those bad choices.