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January 20, 2012

End the energy tax. End it now

Dalton Daily Citizen

We are glad to hear that Gov. Nathan Deal is talking favorably about ending the sales tax on energy used in manufacturing, mining and agriculture. We are not at all pleased to hear him talking about offsetting the revenue that would cost the state by raising other taxes.

Deal recently told the Gainesville Times that any cuts to the energy tax should be revenue neutral. Ending the tax would cost the state $140 million a year, and Deal said one possibility would be taxing Internet sales.

Meanwhile, Lt. Gov. Casey Cagle suggested phasing in the energy tax cut over a number of years rather than ending it completely this year.

We have a better idea. Why not just cut state spending by $140 million and end the tax right now with no new taxes?

Deal has proposed a $19.2 billion budget for next year, up $900 million from the current fiscal year. We’ve already proposed that instead of spending an extra $900 million next year, the Legislature should instead return that money to the taxpayers who earned it. Well, they could end the energy tax and still provide Georgians with $760 million in other tax cuts.

Georgia needs an economic boost now, not in two or three years. Ending the energy tax immediately could provide that boost.

Georgia is the only state in the Southeast that charges sales tax on energy used in manufacturing, and is just one of four in the United States to charge such a tax. Speaking in Dalton in November, Georgia Chamber of Commerce President and CEO Chris Clark said the energy tax makes Georgia less competitive than its neighbors and vowed to make ending the tax one of the chamber’s top priorities this year.

No area in the state needs an economic boost more than metro Dalton (Murray and Whitfield counties), which has the highest unemployment rate in the state (11.8 percent) among Metropolitan Statistical Areas. And few areas could benefit more from ending the energy tax than Dalton, with its high concentration of manufacturing firms.

When a state panel studying tax reform met in Dalton in 2010, local industry leaders named ending the energy tax their top priority. According to information presented at that meeting by the Greater Dalton Chamber of Commerce, the tax costs businesses in Whitfield County $10 million a year.

Ending the energy tax, ending it now and ending it without raising other taxes is possible, and it’s something the General Assembly should take up as soon as possible.

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