Editorial: Tax break bill betrays lawmakers' bias

Editorial: Tax break bill betrays lawmakers' bias

http://www.onlineathens.com/stories/043010/opi_628296007.shtml

Athens Banner-Herald

Published Friday, April 30, 2010

Buzz up!The fact that state Rep. Cecily Hill, R-Kingsland, had - according to the Atlanta Business Chronicle - introduced the tax break that is House Bill 1251"primarily with a huge retail complex planned for her Camden County House district in mind" should have been enough to have kept it bottled up as the piece of special-interest legislation it so clearly was designed to be.


However, the idea of refunding a portion of the sales taxes collected by a tourist attraction - which is how the retail complex is being billed - proved so enticing to other legislators that the bill "was broadened as it made its way through the House so that it could apply to tourist attractions across the state," according to the business newspaper's Wednesday report. The bill passed the Senate this week, after getting through the House last month.

It's important to note here that, under terms of the bill, the refunded portion of sales tax collections wouldn't have to go to the people who actually paid the tax in the first place. While it's certainly possible that a qualifying attraction might offset its tax refund with special admission prices or other deals, a point made explicit in the bill is that a qualifying attraction "shall have no obligation to refund or otherwise return any amount of this sales and use tax refund to the persons from whom the sales and use tax was collected."

Additionally, it's important to note the timetable by which the bill moved through the legislature. It passed the House on "crossover day" - the last day a bill could clear one legislative chamber and remain alive for consideration in the other chamber - and it earned Senate approval on the 39th legislative day of the 40-legislative-day General Assembly session, as lawmakers were wrapping up business. Both are clear indications that the bill was being handled in "under the radar" fashion.

There is little wonder as to why House Bill 1251 was moved surreptitiously through the legislative process. Of course, as already noted, it started out as a piece of special-interest legislation, and it remained suspiciously narrowly tailored. As passed, the bill would apply only to qualifying new tourism projects that cost more than $100 million.

The immediate question, obviously, is why it was applied specifically to those projects, rather than to all of the state's tourist attractions. The answer, just as obviously, is that expanding the tax break beyond new, high-dollar projects could cause significant disruption to the state's revenue stream, a problematic occurrence at a time when a faltering economy has been decimating the state's revenue receipts.

In that light, it's interesting to recall that, just two years ago, a bill that would have applied to both new and expanding tourism projects was vetoed by Gov. Sonny Perdue.

Left unaddressed with this year's bill, as written, is the issue of why any of the state's older tourist attractions, which - like, say, Six Flags Over Georgia - might be generating more tax revenue for the state than newer, less established attractions, shouldn't be allowed to take advantage of a sales tax refund.

The point here is not necessarily to suggest that granting a sales tax refund to some tourist attractions around the state is a bad idea. The point is to suggest that in not applying the refund as broadly as possible, lawmakers have admitted that, sometimes, in some circumstances, tax breaks may not be the most prudent fiscal policy.