That could make for a tough decision for Deal, who has declined to comment on the pending legislation. Capitol observers are quick to invoke Sonny Perdue, Deal’s predecessor, who shook up the statehouse when he vetoed two major tax bills that his fellow Republicans pushed through during his second term.
Jerry Keen, the House majority leader at the time, said he understood Perdue’s stance, even if he disagreed with it at the time. Governors have to consider bond ratings, which determine how much interest states pay when they borrow for construction projects. A good bond rating — which Georgia has — can mean tens of millions in savings. Bond underwriters like state revenue collections to be stable and predictable, he noted.
“As legislators, we want to do some things, and sometimes they have merit,” said Keen, who is now a lobbyist. “But you have to make sure the business, which is what the state is, remains healthy.”
Lobbyists, and the people they represent, play a key role in making broader tax changes more difficult.
Year after year, the Legislature’s two tax-writing committees hear pleas from special interests saying they can create more jobs if they get tax breaks. Sometimes the tax breaks are for an entire industry, sometimes for one or two businesses.
“It’s hard to do true tax reform because to do it, you have to do away with all those little tax cuts,” Keen said. “And there is a constituency associated with every tax credit.”
Kelly McCutchen, the president of the conservative Georgia Public Policy Foundation, has long been a champion of cutting income tax rates and broadening the sales tax base. He gives the House income tax measure good odds of winning final approval this year and said he hopes Deal will support it.
“I would think the chances of getting tax reform this year are the best I have seen in a decade,” McCutchen said.
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