Glenn Richardson: Taking Aim At Property Taxes
Georgia’s speaker is pushing hard for taxes on goods and services that would replace property taxes – and drastically alter the way local governments operate. He says citizens and property owners like the idea, but local officials are les
Speaker of the House Glenn Richardson was the key figure in a colorful and contentious 2007 legislative session that included some public feuding with Gov. Sonny Perdue over a property tax rebate, among other things. Richardson, from Paulding County, is the first Republican speaker in more than 130 years; he rules the House with a firm and heavy hand. He is a strong advocate of eliminating property taxes in favor of sales taxes on goods and services, a plan that would give considerably more power to the state at the expense of local governments. He calls his proposal the GREAT Plan and has said it is his top legislative priority for the 2008 session.
Richardson talked to Editor Susan Percy in his Capitol office in mid-August. Here are excerpts from the interview.
GT: Would you explain your tax proposal?
Richardson: The GREAT Plan? It’s an acronym, Georgians for the Repeal of Every Ad Valorem Tax. The plan eliminates all property taxes on all property in exchange for a broader – not higher but broader – sales tax on all goods and services. That’s a simple explanation.
GT: What kind of services would be taxed?
Richardson: Virtually any services that you can think of. We tend to delineate those – anything where you pay someone to provide a service to you, whether it’s electrical, plumbing, legal, accounting and the like. Some limited medical.
GT: You’ve been traveling around the state speaking to civic groups about your plan. What kind of response have you been getting?
Richardson: Citizens and property owners overwhelmingly support the idea of eliminating property tax in favor of a consumption-based tax. Many local government officials at the county, city and school district level are a little more reluctant to accept change.
GT: Some local officials are concerned about losing the ability to raise money for the things that city and county governments are responsible for. They believe they will lose local control.
Richardson: Local control sounds like they control all the locals anyway. They lose no control. They still get the same amount of money to expend however they wish to expend it. And that just is an improper contention. There is no loss of control. They just no longer can indiscriminately tax the owners of property without regard to their ability to pay.
GT: Would your plan affect local governments’ ability to sell or issue bonds?
Richardson: Yes, it would dramatically affect that. You’d have to get local legislation introduced and approved by the legislature and a two-thirds vote, then put it on a ballot, then get a two-thirds vote at your ballot, unlike the current majority.
GT: Wouldn’t that be more cumbersome than it is now?
Richardson: I hope so. I hope we never again go back to property taxes. I hope when we eliminate them we never go back to property taxes once we pay off the debts we have. It still empowers the ultimate local control – citizens. Those who make the argument that it loses local control forget one thing. Their control is only subject to what the citizens let them have. This is a proposed constitutional amendment. We simply propose to let the locals that these people protest would be losing control decide as to whether they want to eliminate property tax in favor of sales tax system. If the problem’s big enough the local people will have the ultimate local control, but there are going to have to be a bunch of them to agree to put a bond or property taxes back on again.
GT: Is your plan going to be a hard sell in the legislature?
Richardson: I don’t know the answer to that. I think that any change is always hard to sell, but I hope that the members of this body – the House and the Senate – are willing to let the people of Georgia decide. That’s all I’m asking is put it out there as a constitutional amendment and let Georgians decide if they like the idea of paying property taxes or paying consumption taxes in the form of a sales tax.
GT: Is the plan finalized, or are you expecting to make any tweaks or changes to the actual bill?
Richardson: Absolutely. This is a developing process and we’re adjusting, taking suggestions, additions, deletions, criticisms on a daily basis. We get new information that people provide us and [people] tell us things we could think about, and that’s why we’re talking about this so far in advance. We’ll continue to do that up until the matter is voted upon and placed on the ballot. We welcome that. We welcome local officials to join with us in trying to give Georgians a viable choice for how to fund their government.
GT: Are you talking to local officials about your plan?
Richardson: Every chance I get.
GT: Some have criticized a sales tax on groceries as unfairly targeting poor people.
Richardson: I don’t believe that’s true. We don’t propose to cause residents of Georgia who fill out individual income tax returns and make up to $30,000 a year to pay. We’re going to give a refundable credit if they fill out an individual Georgia income tax return and are residents of Georgia, giving them any money back that they may have paid for groceries based upon an economic chart. So that takes care of that argument 100 percent.
GT: You’ve said that taxing food would also yield some tax revenue from people in the state illegally.
Richardson: I don’t think there’s any question about it. I believe it’s clear that there’s several people here in Georgia illegally, and I don’t believe they’re filling out Georgia individual income tax returns. But I do believe they’re drinking milk and eating bread, and they’re not currently paying any taxes on that. We will capture that at the store. If they want to pay income taxes on their income, we welcome them to the income tax system of Georgia and we’ll give them a credit for what they pay for grocery taxes.
GT: You’ve been involved in discussions about Grady Hospital and its financial crisis. Would you talk about the role that you see for the state?
Richardson: I think the appropriate role has yet to be determined. I appointed a study committee of five house members to look into this carefully and give me a recommendation. I don’t want to limit what they come up with; but I think there are some opportunities for us to assist Grady if Grady’s willing to help itself.
GT: Do you see any merit in the suggestion that Grady change its governance system?
Richardson: I think there’s merit in seeing changes at Grady, and that’s all you have to say. It’s clear that the model is not working. As to what those are, I don’t know. But it’s clear that change has got to come in order for me or the House or the study committee to even consider any amount of state resources to be put there.
GT: You were treated at Grady, weren’t you? Taken there after an accident a couple of years ago? Does that affect your perspective?
Richardson: I think it underscores what all of us intuitively know. When we have some kind of an accident in the major metropolitan Atlanta area – car accident, if we’re burned or, God forbid, have some other really difficult injury – the chances are really good that we’re going to Grady for care. So Grady is more than just for Fulton and DeKalb residents. It is the hospital in the capital city of the greatest state in the U.S.; and I think we demand and expect to have healthcare if we need it.
GT: Do you feel you received good care?
GT: Transportation seems to be on everybody’s mind, especially focused on traffic in Atlanta. Is this just Atlanta’s problem or does the state have a role to play?
Richardson: I think we have statewide transportation issues and we need a statewide solution. To that end, we’ve got a joint study committee that’s trying to look into the best way to resolve that. There’s lots of ideas out there. We do have a DOT. We do have SRTA, GRTA, all those acronyms … ARC. Everybody’s trying to solve the same problem, but we seemingly can’t get any consensus on what’s the problem and how to solve it and, more importantly, how to fund how we solve it. That’s what I’m hoping the study committee will come back with – a good, clean recommendation or two with some clear options. I think we’ve got to start thinking differently. We clearly have to start thinking public-private initiatives; we clearly have to start thinking about truck-only toll, and high-occupancy toll. And we’ve got to quit talking about them and start doing them – yesterday.
GT: HB 434, introduced last session, would permit localities to join together to tax for transportation improvements. Is that something you support?
Richardson: That was not my first choice of a method of funding. I think it’s one option that’s out there. We have a statewide transportation problem and need a statewide solution. I do not believe that [HB 434 provides] a statewide solution. It only is a regional plan. The problem with regional transportation problems is multi-faceted. There’s numerous governmental entities in there that you have to get in agreement. It’s difficult to get consensus. Then if you solve the problem in that region … all you do is shift the problem to the next region, next city, next county, whatever the next happens to be. So I’m concerned that that is not the wisest policy decision, although I’ll wait on the study committee to recommend something.
GT: Do see a role for mass transit? Is that something you’re willing to consider?
Richardson: There’s always going to be some form of mass transit – buses are the most logical. I do not believe, in the year 2007, that rail is a viable solution to transporting people. You have, in addition to the stationary nature of it, the slowness of it. You have the added problem of getting everybody to the initial point and how to disperse them from the next point. All that does is further exacerbate the problem when you’re only transporting maybe a couple of thousand people over any five-minute window. That’s not enough. We’ve got to move tens of thousands. The cost-efficiency of that is just absolutely not on the radar screen.
Now I do think rail, especially high-speed rail, is a viable solution for moving freight. And a side benefit of that is you take many trucks off of very crowded roads. If we could adapt an inter-modal facility, inter-modal port and high-speed transport freight from the coast to middle Georgia and then disperse it, you eliminate a lot of trucks on the road; and trucks make up a large part of transportation woes that we have in the metropolitan Atlanta area. So to the extent that we can develop rail to move freight, I think it’s a wise move, because freight is not nearly as time-sensitive on dispersement as people.
GT: If you look back at the last legislative session, what do you see as the accomplishments and what are the things that were left undone?
Richardson: I’m not much on blowing my own horn as to what did or didn’t get done. I’ll be honest – looking back at what we’ve done is not something I spend much time on. I’m more focused on what we need to do in the future. We accomplished our goal. We adopted a budget, we passed some significant legislation. Let’s go on to something else. We’ve got big things to handle in the future: tax reform, high school graduation rates ... trauma care, a statewide trauma care network. Those are the kind of issues that we’ve got to solve.
GT: Are you comfortable that your relationship with the governor and the lieutenant governor will work to the advantage of legislation you want to pass?
Richardson: I’m comfortable that all three of us are professionals interested in doing what’s best for the people of Georgia. In the end that’s what we’ll do.
GT: There’s speculation that you are looking at a run for governor in 2010.
Richardson: I have not made a decision to run or to not run. I have not foreclosed any possibilities, nor do I intend to pursue an opportunity. I’m just doing this job now.
GT: How would you describe your vision for the state of Georgia?
Richardson: I really have firmly become convinced that eliminating property taxes in favor of consumption-based taxes like sales will put Georgia on the map as the only state in the nation to do that. And I think that might be the linchpin for us becoming the most prosperous, most economically developed, educationally-significant state and best place to raise a family in the nation.
Georgia, with 9.5 million people, is one of the fastest-growing states in the nation. And I think we can do better. When we end property taxes, raise graduation rates, take care of the health of our citizens, make it easier and more expedient to transport people around, I think I’ll have done something for all Georgians. The concept of greenspace will have a whole new meaning without property taxes. Citizens can own land and pass it on to generation after generation and not worry about having to sell it because they can’t afford the taxes. They don’t have to cut the timber because they have to pay taxes. They can cut the timber because the timber needs to be cut. Instead of the state owning the greenspace, the citizens will own the greenspace.