Georgia’s jobs focus may shift away from broad tax reform

Boosting jobs and the economy remains atop the to-do list of nearly every elected official you meet. In Georgia, many state officials have pitched tax reform as the best policy to do just that.

But their approach may be changing. At least, that’s the impression I got from Lt. Gov. Casey Cagle during an interview Monday at the Capitol.

Instead, expect Gov. Nathan Deal’s “competitiveness initiative” to take precedence. A group of agency heads and business leaders are due to make recommendations — in such subjects as infrastructure, innovation, education, business climate and government efficiency — before the 2012 legislative session begins in January.

Part of the focus, Cagle said, is diversifying our economy so that it’s no longer so reliant on construction. Industries such as aerospace and bioscience, along with manufacturing more generally, are among what he called Georgia’s strategic industries.

“I expect that we will have some very strong recommendations [for] creating strategic incentives that help those industries that we talk about in terms of diversifying our portfolio,” Cagle said. “We will be debating the removal of the energy tax, which is a huge impediment in terms of retaining and recruiting manufacturing to our state. …

“The other thing we’ll be looking at,” he continued, “is centered around financing, and venture funds. Attracting that venture capital to Georgia, and having ’em invest here in Georgia. And also have assets in Georgia.”

The financing angle is one that’s long been bandied about. Cagle focused specifically on the state’s need to keep the numerous innovative companies that are getting their starts at our universities — but which are leaving the state because the capital they need is based elsewhere.

“You have to partner with venture capital funds, and the state has to become an equity partner as well. Which is going to take investment, that can be used through tax credits, where the state can help create a very large fund that is run by the private sector, that invests in the technology coming out of our universities here in Georgia,” Cagle said.

“And those companies are not only incubated here, but they’re funded here, and they grow here, and they stay here. And that’s the model that has to occur. And it’s no different than you see in the Silicon Valley.”

Exactly how the state would become an “equity partner” is still being debated. So, too, are how big an investment the state may make, and where the money would come from.

Without writing off tax reform, Cagle suggested two reasons the competitiveness initiative’s proposals might take precedence over the revenue overhaul proposed months ago. First, he believes we should focus on those industries (aerospace, bioscience, etc.) in which we already have advantages.

“So, instead of a shotgun approach,” he said, referring to encouraging investment by broadening and flattening the tax code for all, “you take a very rifle-shot approach, a very strategic approach to: What is it we want? We want job creation, we want to encourage investments in Georgia, and we want to see it in a big, big way.”

Second, he’s not convinced legislators will know next spring if state revenues have sufficiently recovered from the recession, and if “the new structure’s going to give you the same amount of money that you had before. That was the problem last year.”

The template Cagle outlined is certainly an about-face from the tax-oriented model that used to be in favor — and, in some quarters, still is. Which brings us to a necessary observation:

Cagle is coming off a bruising start to his second term, in which a majority of GOP senators stripped him of many of his powers, only to relent somewhat when the Senate proved chaotic and their solidarity shaky.

Of that chaos, Cagle said only, “It’s pretty evident [the Senate] was dysfunctional this past session. … we’ve made some progress, and it’s my hope that we’ll make greater progress as the [next] session reaches.”

If the competitiveness initiative’s plans are embraced widely, they will offer a chance for Cagle and the others to prove they can play nice. If not, we may learn quickly just how much progress has been made.

– By Kyle Wingfield

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49 comments Add your comment

Jefferson

November 10th, 2011
10:24 am

What happened to keeping gov’t out of the private sector ?

jt

November 10th, 2011
10:27 am

Beware of a politician wanting to get involved in Venture capitalism.
.
Been there ..done that………the Freed market will do just fine..if allowed.
.
Let us move on.

Bart Abel

November 10th, 2011
10:49 am

As far as I can tell from this piece, this “competitive initiative” appears to consist primarily of yet more corporate tax cuts…eliminating the energy tax and adding other corporate tax credits. This sounds like more of the same and helps to explain why Georgians are being asked to pay more in the form of sales taxes just to keep our heads above water in education and infrastructure.

Jefferson

November 10th, 2011
10:53 am

Nothing is created or distroyed, it just changes form.

Hillbilly D

November 10th, 2011
11:25 am

If the “competitveness initiative” doesn’t include tax breaks and credits for certain chosen ones, I’ll be amazed.

ragnar danneskjold

November 10th, 2011
11:45 am

I do not like the state-as-equity-partner. That is mercantilism, as normally practiced by democrats (green energy, housing subsidies, trade restrictions, regulations that inherently favor big business over small business.) Rather than seeing elected officials pretend to be investment bankers using taxpayer monies, I would prefer to see elimination of licensing and regulations, to make Georgia the Hong Kong of the US. As the voters of Ohio have wedded that formerly-industrious state to an unsustainable government structure, we have now a great opportunity to steal a lot of businesses, with no more changes than simple business-friendly practices.

Kyle Wingfield

November 10th, 2011
11:56 am

ragnar: I tend to agree with you.

DW

November 10th, 2011
12:02 pm

+1 HILLBILLY

sean Smith

November 10th, 2011
12:23 pm

So instead of lowering taxes on ALL business the republicans are going to be picking WINNERS and LOSERS???? Isn’t that what they are complain Obama did in saving detroit and the auto industry??

Bart Abel

November 10th, 2011
12:44 pm

ragnar brought up an issue, licensing, that doesn’t get nearly enough attention.

Nuance is important, and I would never argue that all licensing is either good or bad. However, some licensing requirements are industry-friendly in that they work largely to keep the supply of providers artificially low and, therefore, prices for their services artificially high. Ideally, our state legislators would take a closer look at its licensing laws to determine where they provide public safety versus where they protect those with influence under the Gold Dome.

JDW

November 10th, 2011
12:50 pm

Well Kyle, Cagle actually makes sense…for that reason alone it is hard to fathom the current crop of “Gold Domers” getting on board.

Lil' Barry Bailout (Revised Downward)

November 10th, 2011
12:53 pm

What happened to keeping gov’t out of the private sector ?
——–

Amen to that. Obozo has shown us in spades why that’s a bad idea, through his repeated failures and flushing billions down the toilet.

Kyle Wingfield

November 10th, 2011
12:54 pm

Bart: You could say — and I have said — the same thing about regulations more broadly. They often are created, or at least revised, to protect incumbents that would rather bear the costs of abiding by them than compete with small up-and-comers that can’t afford said costs.

Bart Abel

November 10th, 2011
1:03 pm

I suspect that’s true in some instances, Kyle. Where regulations are created for that purpose, they should be eliminated or modified. But many among the right would have us throw out the baby with the bath water.

brad

November 10th, 2011
1:33 pm

Next up, Tiny Barry explains that Obama caused the Penn State debacle.

@@

November 10th, 2011
1:46 pm

I’ve had enough of government’s ad-ventures to last a lifetime…my daughter’s too.

Puts me in mind of that old adage…pickin’ friends and pickin’ noses. We’d all be better off if politicians just sat around pickin’ their noses.

I’m kinda picky about who and what I wanna invest in.

carlosgvv

November 10th, 2011
1:53 pm

Serving the needs of their corporate masters is “atop the to-do list of nearly every elected official you meet”. Everything else is a dim and distant second. Anytime politicians talk about job creation or anything else, you must always keep this in mind.

dixiedemons

November 10th, 2011
2:09 pm

That GOP leadership you voted for is going to get you out in the field picking fruit , vegetables , and cotton one way or the other.

Aquagirl

November 10th, 2011
2:11 pm

Attracting aerospace and science is tough when you look like a bunch of hicks. We need more water? Pray! Yeah, engineers really trust that sort of approach.

Biotech industries run like h3ll from government controlled by science-impaired mobs. All it takes is one crazy forwarded e-mail and millions of dollars of research could go down the drain. Literally. Even if you’re not dealing with stem cells, try explaining that to people who think the earth is 6000 years old. They’ll still demand legislation and they’ll get it. Let’s not forget one of Georgia’s proudest moments, when Chip Rodgers’ legislation unearthed the poor soul concerned her anal implant transmitted personal information to billboards around the city.

Tax breaks are not a substitute for sanity.

jd

November 10th, 2011
2:16 pm

Focusing on eliminating more regs is a marginal exercise at best. Georgia is already ranked one of the best places to do business based on such analysis. Cagle is right – time to be strategic — unless we wish to be no better than SC or MS

Jefferson

November 10th, 2011
2:20 pm

Why have refs at football games — same reason you have regulations on busineses. They will lie, cheat, steal and game the system if left alone.

@@

November 10th, 2011
2:29 pm

Let’s not forget one of Georgia’s proudest moments, when Chip Rodgers’ legislation unearthed the poor soul concerned her anal implant transmitted personal information to billboards around the city.

Then there was Joe Biden’s comment during Chief Justice Roberts confirmation hearing:

Joe Biden states emphatically microchip implants and brain scans to determine criminal propensity will be ruled on by the Supreme Court.

EVERYBODY was talkin’bout it.

From FNN to SFgate.

UGA 1999

November 10th, 2011
2:32 pm

Gwinnett County is doing a great job of getting businesses to bring their headquarters there. This is because they are aggressive on the taxes and and benefits those companies would receive by moving here.

Kyle Wingfield

November 10th, 2011
2:37 pm

Right, Aquagirl. I guess that explains why we’re No. 7 nationally both in aerospace employment and exports, and top-15 nationally in most metrics related to bioscience, including No. 8 when it comes to growth of NIH funding for bioscience.

I’m sure we’d already be No. 1 if Sonny had never prayed for rain! :-(

UGA 1999

November 10th, 2011
2:41 pm

Kyle….isnt it amazing.

Aquagirl

November 10th, 2011
2:53 pm

@@, it’s hard to ferret out your supposed point.

Acknowledging microchips exist = paranoia that somebody’s going to plant one in your nether parts against your will? Joe Biden is running for governor of Georgia? A fruitcake website (also covering truther and Illuminati crap) is “everybody?”

Closing your tags wasn’t the only FAIL in your post. Congrats on the stellar effort there, the amount of thought really shines through.

JDW

November 10th, 2011
3:45 pm

@Kyle…”I’m sure we’d already be No. 1 if Sonny had never prayed for rain!”

While it didn’t have much impact on those that were already here, it is not a reach to think that sort of approach to problem solving didn’t win us any new job creators.

Aquagirl

November 10th, 2011
3:54 pm

Kyle, 7th in aerospace? We do have a good proportion of aerospace centered in Lockheed, a couple of those F-22’s are probably more than the entire export of many nations. Maybe I should have clarified non-bungling idiot aerospace engineers, the ones we attracted didn’t exactly do a stellar job. The good news is that we’ll probably get at least part of $24 million to fix the design screwups and make sure pilots can breath while flying. As a Georgian, I’m not terribly thrilled our economic growth is augmented by depriving U.S. pilots of oxygen. YMMV.

BTW, If you’re proud of those wages, thank the more than 2,000 Lockheed members of the International Association of Machinists and Aerospace workers. I know you love Unions.

As far as bioscience, we’re the 9th largest state in population and the CDC is located here, being 13th or 15th statistically is not a bragging point. If we’re 18th in patents granted, the smart, innovative folks in *private enterprise* are obviously not flocking here.

Kyle Wingfield

November 10th, 2011
4:13 pm

Aquagirl: I didn’t make up the stats. The links to my sources are in my comment. If you want to disparage the people behind those stats, I guess that’s your prerogative.

As for being 13th or 15th in bioscience when we’re ninth in population: You’ll also note that bioscience underperforms as a percentage of all R&D in Georgia, compared to the share of national R&D money it represents. That may say something bad about our bioscience industry (the slice is too small), or it may say something good about R&D here on the whole (the pie is quite big). But, given that we were slightly outperforming our size in the growth metric, it would appear that focusing more intently on that industry is working.

LD

November 10th, 2011
4:33 pm

There are two kinds of incentives–those that create jobs for Georgians and those just create jobs for people brought in from other places to work in the new company that cost Georgians. Given the current pro-business-to-the-point-of-being-anti-employee GOP, the latter will be the more likely.

LD

November 10th, 2011
4:34 pm

Effective, competitive bioscience in the bible belt? Dream on.

LD

November 10th, 2011
4:37 pm

A signifigant part of the future of bioscience R & D is in stem cell research. If everyone–worldwide–were limited to adult stem cell research also, then Georgia could compete. The playing field, however, is not level because of those that want to impose their religious beliefs on others.

LD

November 10th, 2011
4:45 pm

Given the water issues that Georgia has had–including litigating w/our neighbors –seemingly forever– and that Georgia does have a coastline, I’d like to see Georgia –via Georgia Tech, etc.–working to make desalination of sea/ocean water more energy efficient so that Georgia might be able to tap into that national freshwater shortage and non-carbon energy shortage. There is supposedly some promising research in cleaning dirty water beginning w/solar energy that pumps contaminated water through a filter, separates it into hydrogen and oxygen (which can be used as fuel) or retrieved together again as fresh water. This kind of research and development should be considered if for no other reason than to keep Atlanta functioning.

Any incentives should FIRST at least try to target Georgia business innovation and expansion–not just attract foreign auto makers, etc., that will send the profits out of state or out of the US and that can, on a whim, remove their industry

Aquagirl

November 10th, 2011
4:49 pm

I didn’t make up the stats.

No, but it’s unclear to me what that 7th place in employment entails, since it’s not a comparison chart, and the only way I can see each state is individually. I’m guessing total number of jobs. Our average pay does look low compared to other states with similar number of workers. Attracting more lower-paying jobs in the same field doesn’t speak well of Georgia.

And if you’re going to pick one number out of the relative mess of bioscience—hey look, we’re growing, sorta!—I admire your optimistic outlook. The only area where pay is comparable is for pharmaceuticals. Research and lab industry pay is a shocking near $25,000 gap. I have no idea what accounts for that lag, but it sure can’t be good. Again, are we growing the low-paying jobs? Not impressive.

@@

November 10th, 2011
6:29 pm

Aquagirl:

Joe Biden is running for governor of Georgia?

No. He’s Obama’s Vice-President.

A fruitcake website (also covering truther and Illuminati crap) is “everybody?”

It was readily available. I’m feelin’ lazy today.

The kooks pulled from some of your favorites:

MSNBC?

Businessweek?

LATimes?

SeattleTimes?

Associated Press?

SFGate?

ABC News?

The AJC?

USAToday?

Washington Post?

CNN?

BBC?

There’s a second page of media articles, but like I said…I’m feelin’ lazy today.

Don’t be gettin’ “pithy” now.

schnirt

Just so you know…I like Joe…in spite of his kookiness.

Lil' Barry Bailout (Revised Downward)

November 10th, 2011
6:49 pm

LD: The playing field, however, is not level because of those that want to impose their religious beliefs on others.
——————————

Obozo: “Today, with the executive order I am about to sign, we will bring the change that so many scientists and researchers, doctors, and innovators, patients and loved ones have hoped for, fought for these past eight years.”

LD talking point go bye-bye.

@@

November 10th, 2011
7:00 pm

Wait a minute, Aquagirl!

WANT to KNOW. INFO: Reliable, verifiable information on major cover-ups and a call to work together for the good of all.

Reads like a lib website. …working together for the good of all?

Joe’s in the know.

saywhat?

November 10th, 2011
7:22 pm

I for one am glad the Georgia Senate is changing their focus, especially since tax reform (the Republican code words for tax cuts for the rich, tax hikes for the poor and middle class) does absolutely nothing to create jobs. I do however also have serious doubts about the local yokels getting involved in venture capital with public money. If they want to invest public funds, invest it in infrastructure. That is what creates jobs and attracts new businesses.

lbb- allowing people to choose what they want to do based on their own ethical/moral beliefs does not impose anything on anybody who is also free to choose not to participate. However, DENYING large numbers of people the right to do as they choose based on the beliefs of a small minority DOES impose on others. lbb rebuttal go bye bye.

Eagle

November 10th, 2011
7:53 pm

I have a pretty good idea where the state will find the money to become an “equity partner” – public employees’ retirement funds. GPPF has been advocating that the state allow the plans to permit alternative investments such as venture capital funds. And they’ve noted that the positive impact on Georgia jobs. Of course, I thought that investment managers have a fiduciary responsibility to those individuals served by the plans, which would require placing alt investment money in the best possible place (which may often be in another state). Are investment managers now responsible for job creation?

Prediction – Within 10 years of this change, there will a scandal involving an investment in a company with connections to a high-ranking official.

Prediction2 – If the investments do not perform well, the employees will be blamed for overly generous retirement plans. (If they’re overly generous – cut them now.)

Lil' Barry Bailout (Revised Downward)

November 10th, 2011
8:58 pm

lbb rebuttal go bye bye
———————–

So your Idiot Dear Leader didn’t lift our President Bush’s rules against federal funding of certain stem cell research?

Sorry, buy you are mistaken.

http://www.cbc.ca/news/world/story/2009/03/09/obama-stem-cells.html

Too bad your hatred of people who aren’t like you (Americans) doesn’t go bye bye. Hating America is a prerequisite for voting for Obozo though, so at least you’re consistent.

Michael H. Smith

November 10th, 2011
9:38 pm

Kyle Wingfield

November 10th, 2011
4:13 pm

Good volley Kyle. You caught a liberal screed merchant shooting off at the mouth again to affirm their hatred and bigotry of Jawja! Especially since we kick their fascist socialist democrat’s butts out of power. But don’t cry fascio-socio-libs only hmm… about 92 years left to go before the Republicans have had their 100 year term. :lol:

Oh, and don’t worry, the state will still be here… after those damn democrats of yours, Jawja can stand just about anything!

Michael H. Smith

November 10th, 2011
10:01 pm

ragnar danneskjold

November 10th, 2011
11:45 am

I’m with you in opposing the crony capitalism of government picking the winners and losers. obumer and the demwits have given proof in the things you’ve pointed out. However, I’d precede with caution on riding ourselves altogether of licensing and regulating powers. Corporatism isn’t any better than Mercantilism: Meaning business should not be involved in governing anymore than government should go into a business that competes against or with a private sector business – literally or by proxy via bailout, taxpayer funding or regulations.

Furthermore, it might be worthy to consider inciting businesses and corporations to further lower their tax rates by hiring unemployed Georgia residents and retaining them on payrolls. My goals in this area by now should be well known by most, as I favor doing away with the business/corporate taxes, which are passed onto we the consumer eventually by hook or by crook.

If people don’t like the idea of corporations being counted as people, then stop taxing them as such, mr ridiculous supreme court insulting obumer jerk and demiwts!

Aquagirl

November 10th, 2011
10:12 pm

@@……?

You might want to keep those free-association exercises for therapy. Either that, or lay off the sauce before blogging.

Boe Jiden

November 10th, 2011
10:58 pm

I did not have nor did anyone in my office have an orgasm at the time when that woman, Solyndra, was soliciting a taxpayer loan.

That’s what I’m talking about, so don’t mess with me on this one guys.

@@

November 11th, 2011
4:50 am

Aquagirl…always the pithy mithy.

You might want to keep those free-association exercises for therapy.

Ain’t nuthin’ in life free. Most folks know that.

You? Not so much.

@@

November 11th, 2011
5:06 am

(CNN) – A new study shows that attending religious services regularly can mean a more optimistic, less depressed, and less cynical outlook on life.

According to the report, to be published this week in the Journal of Religion and Health, those who attend services frequently were 56% more likely to have an optimistic life outlook than those who don’t and were 27% less likely to be depressed. Those who attended weekly were less likely to be characterized by cynical hostility, compared with those who did not report any religious service attendance.

AmVet?

Lil' Barry Bailout (Revised Downward)

November 11th, 2011
5:28 am

U.S. Delays Pipeline Decision
Administration to Explore Rerouting Keystone Project Amid Environmental Concerns

WASHINGTON—The Ob[ozo] administration said Thursday it would seek to reroute a portion of a proposed Canada-U.S. oil pipeline, postponing until after the 2012 election a decision on an issue that has divided the Democrat Party’s environmental and union supporters.
———————————

Obozo: Coward.

Lil' Barry Bailout (Revised Downward)

November 11th, 2011
5:29 am

More uncertainty, fewer jobs.

saywhat?

November 11th, 2011
10:35 am

lbb- try a little reading comprehension, cupcake. I never denied that our President changed federal funding rules of stem cell research. I said that it doesn’t impose religious beliefs on anybody against their will,or deny anybody their freedoms.

If you don’t like stem cell research, don’t do any, and don’t partake of any medical advances which may result from federally funded stem cell research. It won’t be any great loss to the rest of us if you don’t.