Georgia Lawmakers Vow Not to Tax Food and Housing if They Eliminate State Income Tax

Georgia Republicans who want to eliminate the state income tax vowed on Wednesday that they would not pay for it by taxing groceries and housing.

Sen. Blake Tillery, R-Vidalia, secured agreement from a largely Republican study committee to neither impose a state tax on property or on grocery sales nor to increase the gasoline tax.

Tillery chairs both the Senate Appropriations Committee and a Senate committee that is studying how to abolish Georgia’s 5.19% income tax.

The move by Tillery, a candidate for lieutenant governor, illustrates the challenge. To eliminate the state income tax, lawmakers must either cut the budget or secure other sources of funding to maintain government services.

At their meeting Wednesday, senators heard from current and former officials from other states that do not have an income tax or are in the process of eliminating one.

Those states tend to rely on sales taxes, which take a proportionately larger bite out of the paychecks of consumers who earn less.

In Florida, for instance, three quarters of general revenues — $50 billion — come from a 6% sales tax, said J. Ben Watkins, the Sunshine State’s director of bond finance.

He told the senators at the Georgia Capitol that the absence of an income tax has driven population growth in Florida — and sales tax revenue along with it.

“People have flocked to the state — remote working, second homes, retirees,” he said. “Wy do people move to Florida? What is our secret to success in Florida? Warm climate and low taxes.”

Sen. Nan Orrock, D-Atlanta, one of three Democrats on the 11-member committee, pushed back, saying sales taxes place a relatively higher burden on low-income earners than an income tax.

But Sarah Hicks, a former budget director for the Republican governor of Texas, Greg Abbott, said businesses are attracted by the absence of an income tax. Those businesses create jobs that attract workers and grow the economy, she said.

“I think people go where jobs are, and they go where they know what to expect,” she said.

About half of Texas’ revenue comes from the state’s sales tax, Hicks said.

At a previous hearing, in August, the nationally known anti-tax crusader Grover Norquist recommended a gradual reduction in the income tax rate on the path to elimination.

Georgia is already going that direction. The General Assembly voted to reduce the income tax rate from 6% to 5.75% in 2022, gradually lowering it to 5.19% this year.

Tillery ended the meeting after securing the votes against offsetting taxes to groceries, property and gas. He said the next hearing will be in mid- to late-October.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.

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