Desperate times are producing extreme — but creative — measures at the state Capitol.
One is HB 1380, a bill that would allow the state and local governments to bet that thousands of teachers, cops, street-sweepers and pencil-pushers in Georgia will drop dead before their time.
The legislation declares that public pensions have “an insurable interest in any individual who is an employee of the state or political subdivision.”
Retirement systems would be permitted to take out life insurance policies — called “dead peasant” or “dead janitor” policies by some — on the employees and retirees they cover. If a janitor or teacher crossed the River Jordan, the policy payout wouldn’t go to the surviving spouse or children. The cash would go into the pension fund itself.
Many find the idea creepy. Others say dead-janitor policies can shore up the increasing cost of employee benefits, which have become a heavy drain on governments — particularly in the city of Atlanta. The bill would allow employees to opt out if they object. In writing.
It’s a serious proposal. The sponsors are House Appropriations Chairman Ben Harbin (R-Evans) and Rep. Mark Burkhalter (R-Johns Creek), the former House speaker.
One could say, entirely in jest, that this is an opportunity for the Legislature to turn layoffs into a highly profitable enterprise. But that would be cruel.
Then there’s the case of Gov. Sonny Perdue, who was in danger of becoming an irrelevant cipher once the Legislature left Atlanta.
But the Legislature rescued the two-term governor from his lame-duck status this week, assigning Perdue — and a few others — the task of rewriting the state’s tax code.
Even after he walks out the door in January, Perdue could very well be the face and voice of the largest overhaul of the tax system in state history.
Until he exits the Governor’s Mansion, Perdue will certainly control the facts and stats to be crunched by him, four economists, former Gov. Zell Miller, the leaders of the Georgia Chamber of Commerce and the state chapter of the National Federation of Independent Business, and a few others.
Their recommendations, once approved by a special, Republican-dominated leadership committee of the Legislature, would bypass the normal committee system and go straight to the House for an up-or-down vote. Upon passage, the Senate would be faced with a similar decision.
If it blows up, the mess can be blamed on a long-gone governor.
Lt. Gov. Casey Cagle and House Speaker David Ralston say the effort is modeled after the congressional approach used to close U.S. military bases across the country.
One reason for this extraordinary effort is the state’s AAA bond rating, which allows the borrowing of money at cheap rates. It is a legacy from years of Democratic rule that Republicans have been able to maintain — a prized symbol of competence.
But bond rating companies have quietly warned that, while Georgia is in better shape financially than many other state governments, its finances are built on tax revenue streams that run hot and cold. And Wall Street hates uncertainty.
Losing that AAA bond rating would carry a terrific political price.
Senate Majority Leader Chip Rogers (R-Woodstock) gave strong hints of how Georgia’s tax burden is likely to shift. “We have a broken property tax system that’s a relic of a 19th-century agrarian economy,” he said. Rogers thinks the state’s income tax is too closely tied to unemployment to be reliable. He and other Republicans have been eager to dump the corporate income tax for years.
Which leaves an obvious target. “We have a sales tax system that exempts more products and services than it actually taxes,” Rogers said.
And that brings us back to 78-year-old Zell Miller, whom the lawmakers want to join Perdue in the tax rewrite. Why?
Because Miller knows the state budget and is not tied up in a political campaign, said House Majority Leader Jerry Keen (R-St. Simons Island). But Keen was being disingenuous.
The Capitol’s GOP leadership wants Miller for two reasons. First, among Republicans, the former governor and senator is a living saint. Secondly, Miller is an essential part of Georgia’s tax history.
Fourteen years ago, Miller pushed through the sales tax exemption on food. A sales tax on food is the kind of reliable revenue stream that Wall Street respects. Taxes on real estate are vulnerable to bubbles. People without jobs don’t pay income taxes. But everyone has to eat.
And if Republicans want to reinstate the sales tax on food, it would be nice to have an endorsement from the man who lifted it.
“I have a call into Governor Miller,” Ralston told reporters. “As you know, his health has not been the best lately, so we’re waiting to hear back from him.”
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