March 12, 2008

Focusing on the future of manufacturing in Georgia

By Sen. Tim Golden

Georgia prides itself in having a pro-industry business climate. But in light of the fact we have lost more than 130,000 manufacturing jobs in the last eight years, perhaps this would be a good time to step back and take a true assessment of whether our state is doing all we can to attract manufacturers who make quality products, create employment opportunities and contribute to the community – economically and otherwise.

In the state legislature, are we helping develop the innovative ideas and implementing the sound public policies that it takes to recruit industry, help existing businesses grow and target especially high-growth industries? Finally, after several years of hand-wringing about the effects of global competition, the short answer for 2008 is yes. For example:

HB 237, introduced by Rep. Chuck Martin (R-Alpharetta), would expand the sales tax exemption for machinery and parts used in the manufacturing process. This “integrated plant theory” exemption would encourage manufacturers to invest in new facilities and to upgrade existing plants, allowing Georgia factories to remain competitive with those in other states and continue to create jobs.

HB 272, introduced by Rep. Jeff Lewis (R-Cartersville), would place a cap on the state sales tax on spiking energy costs for manufacturers. Hopefully one day we will be able to eliminate the energy sales tax on manufacturing all together.

SB 359, which I introduced with the support of Lt. Gov. Casey Cagle, would create the “Made in Georgia” initiative to promote the sale of products made in our state. The bill sailed through the Senate, and Rep. Ron Stephens (R-Garden City) is working to steer it through the House this session.

These kinds of legislative proposals are a great start, but in my opinion, they are only a start. More needs to be done to make Georgia a leader in and destination for industry. Manufacturers have a huge impact on the economy throughout our state, representing 10 percent of the overall workforce and 17 percent in rural areas. In many communities, that figure exceeds 20 percent, and manufacturing is the very lifeblood for those residents.

Manufacturing jobs pay higher wages than those in other sectors of the economy. According to Mercer University economist Roger Tutterow, average weekly manufacturing wages were 10.7 percent higher statewide and 20.2 percent higher outside metro Atlanta than the average pay for non-manufacturing employment during 2006.

In addition, Tutterow reports the “multiplier effect” in the manufacturing industry is among the most significant in our economy. A study prepared for the National Association of Manufacturers, every dollar of final demand for manufactured goods generates an additional 67 cents in other manufactured products and 76 cents in products and services from non-manufacturing sectors.

It has never been more vital for state government to be doing all it can to recruit and keep manufacturing jobs here in Georgia. It is the responsibility of the legislative branch to establish the pro-business policies that will facilitate that effort.

This is why Sen. Chip Rogers (R-Woodstock) and I have co-authored and introduced SR 1097, which would create a Senate study committee on the Future of Manufacturing in Georgia. The legislation would authorize the lieutenant governor to appoint a bipartisan committee to undertake a comprehensive evaluation of the condition of manufacturing in Georgia and whether our current laws are helping or hurting.

The focus of the study will range from energy and taxation issues to transportation (including air transit and ports) to plant renovation to workforce education and training to outsourcing prevention to green industry opportunities. We will bring in experts from industry, government and academia to share their knowledge and ideas.

At the end of the study, the committee will make recommendations for legislation to be considered during the 2009 legislative session.

The time to act is now. If you don’t mind my saying so, this effort could lead to a “Golden Age” of manufacturing in Georgia.

• Sen. Tim Golden (D-Valdosta) represents Georgia Senate District 8 and is Chairman of the Senate Democratic Caucus.