Ralston eyes tax reform to boost Georgia jobs — just not yet

This summer’s meeting of the Legislature is extremely limited in scope. That’s by design: Redistricting is such a deeply political process that it’s best to wait until a regular session to deal with other matters.

That’s the case even when those “other matters” include measures to help Georgia’s economy get out of neutral and put Georgians back to work.

“I don’t know of anybody who really would doubt the fact that [that’s] one of the things we ought to be about, more than any other here,” Speaker David Ralston told me in an interview in his Capitol office Tuesday.

“Not government creating jobs, but government getting out of the way and allowing a climate to grow where small businesses across the state feel safe in maintaining the number of employees they have or growing a few employees, [and where] new companies want to come here and do business here because of the economic climate that we have.”

By the numbers, Georgia’s employment situation is a mixed bag. The statewide unemployment rate in July was the same as it was a year earlier: 10.1 percent. The number of Georgians employed by the private sector was virtually the same as last July — although that’s mostly because losses in metro Atlanta barely canceled out gains in the rest of the state.

On the bright side, Gallup’s “job creation index” — which compares the number of people who say their firms are hiring to those whose employers are shedding jobs — ranked us No. 10 in the nation in the first half of 2011. In our region, only South Carolina fared better. By this and other measures, Gallup put Georgia in the middle of the pack from 2008 to 2010.

Improving that situation will return to the agenda come January, when the General Assembly convenes its annual 40-day session. The centerpiece, Ralston said, will be taking another crack at revamping Georgia’s antiquated tax code.

“I view tax reform as a jobs plan,” Ralston said. “That was what was…driving me primarily on that issue last session. I think there are some things that we can do.

“We’ve looked at what other states are doing — Texas, Virginia, North Carolina and others that have had pretty good track records on jobs over the last few years, and there’s no reason we can’t be as competitive as any of those states.”

Tax reform was the subject of a months-long study by business leaders and economists from across Georgia, who presented their recommendations just before this year’s session.

Lawmakers scrapped some of their ideas, such as restoring the state sales tax on groceries as part of a sharp shift of the tax burden from income to consumption. The resulting plan lowered income tax rates less impressively. A dispute over the underlying data finally led Ralston to pull the plug on it.

“People can have honest differences about the policy, one way or the other,” Ralston said Tuesday. “Do you support an energy exemption, for example, which I think would be huge…to jobs here in Georgia. You can oppose that as being a budget-buster.

“But what I think we can’t have is a debate about whether the data is credible and whether it’s reliable, and that was the concern I had there in the closing days of the session.”

Less likely to gain favor is joining the other 49 states in letting our state pension plans invest in venture capital funds, in hopes of attracting investors’ money to Georgia’s start-ups.

Ralston said he’s “not outright, categorically opposed to that,” but he is wary of repeating other states’ mistakes.

One place not to look for a hiring spurt: the state budget. “Even given the modest increases we’ve had in revenues over the past 12 to 14 months, we’re still in a budget crisis,” he said.

Come January, this summer’s redistricting fights might be a relatively fond memory.

– By Kyle Wingfield

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