Tax reform will take another turn today in the General Assembly as the House votes on the speaker’s new tax proposal.

The long-awaited tax reform package proposed by state House Speaker Glenn Richardson, R-Hiram, took a new identity Tuesday before going to the House floor for a vote today: tax cut.

The proposed legislation would incrementally eliminate the ad

valorem tax on vehicles over a two-year period without replacing it with a sales tax on services, as earlier proposed. The result would be an annual $672 million drop in state revenue once the measure takes full effect in fiscal year 2010.

“That money is used for funding some very important programs: Hospitals, mental health and schools and colleges,” said state Rep. Bobby Parham, D-Milledgeville. “Doing the things we want accomplished costs money.”

The proposal also would freeze tax assessments at 2008 levels on all property and cap annual assessment increases at 2 percent on residential properties and 3 percent on nonresidential properties. Local governments would have to pass a referendum to raise revenue growth above the level of inflation, and boards of education would need to receive local ballot approval to raise the millage rate above a 20-mill cap.

The proposed legislation would amend the Georgia Constitution and require a two-thirds majority in both chambers to make it to voters on the November ballot.

Much of the proposal's freeze and cap strategy was taken from legislation that originated in the Senate.

“I'm glad to see the House is doing something,” said state Sen. Johnny Grant, R-Milledgeville, who supported Senate legislation that made it into the speaker's bill. “This is quite a change from the speaker's original proposal, and I think that highlights the difficulty and complexity of any reform to Georgia's tax code.

District 5 County Commissioner Bubba Williams, who supports a cap and freeze on property tax assessments, applauds the speaker's initiative to push some kind of tax reform.

“Thank goodness for the state intervening at this point,” Williams said. “But I don't know what eventually will come out of it.”

Other local officials share Williams' uncertainty about the outcomes of a bill that limits the revenue growing communities across the state can expect to budget their future.

“I think the measure will hurt municipalities' ability to levy taxes and provide quality services,” Milledgeville District 1 City Councilman Ken Morgan said.

Georgia is one of the fastest growing areas of the country in terms of population, Morgan said. He fears capping revenue growth could hurt communities' ability to respond to growing needs for services.

“How are we going to manage to do more for less?” Morgan said.

Despite growing populations across the state and in Baldwin County, District 4 County Commissioner Bobby Blizzard said tax cuts mixed with revenue caps diminishes the county's ability to respond to unanticipated increases in service costs.

Blizzard cites a recent staph infection that broke out in the county jail resulting in increased costs for inmate care.

“There's no way cities or counties can come up with revenue for unexpected expenses,” Blizzard said.

The speaker's proposal puts officials in a difficult position to oppose popular tax cuts and reform at the potential cost of future growth.

“I don't think anyone is adverse to decreasing the burden of property taxes, but considerable thought must be placed into how local governments are going to fund their budgets,” Milledgeville Mayor Richard Bentley said.

And today the burden of voting on a measure that could come back to haunt them no matter the outcome falls only on the House.

“I'm trying hard to read and digest it all,” Parham said Tuesday. “But tomorrow's the day.”

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