FOR IMMEDIATE RELEASE – April 16, 2010

Contact: Sen. Tim Golden, 404-656-7580 or tim.golden@senate.ga.gov

Legislation eliminates retirement income tax, state property tax

By Sen. Tim Golden

On Wednesday, the Senate voted to approve compromise tax legislation intended to help balance the fiscal year 2011 state budget as well as phase out both the state income tax on retirement income and the state's property tax.

HB 1055, which was also approved by the House of Representatives and now goes to the governor for his signature, provides the income tax relief to Georgia seniors that I have supported for several years. In 2006, I introduced an amendment to expand the state's tax exemption on retirement income, in an effort to give more spending power to middle-class Georgia retirees, which in turn would boost the state's economy, dramatically so in rural areas and small towns hit by job losses over the years.

This is an economic development issue, especially in areas like ours on the border with Florida, which has no state income tax. With this aid to recruit retirees into Georgia, state and local governments would more than recoup any income tax losses through increased sales and real estate tax revenues, not to mention the positive employment impact on new home construction, service industries and virtually every segment of the economy.

Triple Crown Hometowns, a retirement development partnership serving Lowndes, Brooks and Lanier counties, has demonstrated strong support of this type of tax relief, which will make Georgia more retiree- friendly and attractive to seniors.

This legislation would eliminate the income tax paid by persons 65 or older on passive (non-wage) income by 2016. It also gives property owners some relief by repealing over time the quarter-mill state property tax levy.

In an effort to shore up a portion of the state's revenue losses and balance next year's budget, HB 1055 also adjusts a number of licensing, registration and user fees on state services to bring in approximately $96 million. Some of these fees had not been changed for more than 30 years and even after this increase will still be among the lowest in the Southeast.

The bill also includes a 1.45 percent provider fee on hospitals to help reduce the state's Medicaid deficit. I still have concerns about the so-called "bed tax," but it was accepted by the health care community as the lesser of two evils after Gov. Perdue threatened to reduce Medicaid reimbursements by 10.25 percent and eliminate the sales tax exemption for non-profit hospitals.

GEFA Loan Sell-Off: Also this week, a slim majority of Senators voted to approve the governor's proposal to sell a portion of the Georgia Environmental Facilities Authority (GEFA) loans on Wall Street in order to raise some $290 million to help balance the budget. I voted against HB 244 because the loans are valued at $676 million. It makes no sense to sell off these assets at less than 50 cents on the dollar for a one- time budget fix. GEFA loans are made by the state to local governments at low interest rates to finance infrastructure projects across the state. Selling off this revolving revenue source will likely destroy the program, ruin Georgia's AAA bond rating and force more expensive borrowing by local governments.

In other action this week, the Senate approved the following legislation:

HB 361, which would authorize hospital pharmacists to collaborate with members of the medical staff on drug therapy management.

HB 665, which would create a pilot program for the electronic transmission of absentee ballots by military personnel and other citizens who are overseas.

HB 1015, which addresses gang-related crime and would create new offenses for those who recruit gang members or retaliate against witnesses. The bill also encourages the creation of the Georgia Criminal Street Gang Database.

HB 1179, which would require hospitals to provide annual flu shots to employees who come in contact with patients, although it would not be mandatory for the employees to take the shots.

HB 1322, which would prohibit the public release of graphic crime scene photos that depict a dead person in a state of nudity, dismemberment or decapitation.

Economic Update: Gov. Perdue announced last week that for the first time since November 2008, the monthly collection of state revenues reflected an increase in March. Net revenue collections grew by $10.5 million last month, to $998.2 million from $987.9 million in March 2009. While representing only a 1 percent increase, it was the first positive piece of economic news in well over a year for Georgia lawmakers and is hopefully the sign the downturn in state revenues is beginning to level off. Less encouraging was the unemployment report for March, which showed Georgia's jobless rate increased slightly to a record 10.6 percent.

Four Days Left: The General Assembly will reconvene on Tuesday, April 20, for the 37th legislative day of the 2010 session, which is now scheduled to adjourn on Thursday, April 29. This is reportedly the longest Georgia legislative session since the 1880s.

Sen. Tim Golden represents District 8 (Brooks, Cook, Lowndes and Thomas counties) in the Georgia State Senate. Contact him at 121-A State Capitol, Atlanta, Ga. 30334; by phone at 404-656-7580 or by e-mail at tim.golden@senate.ga.gov.