(The Center Square) – At 10 p.m. Thursday, Georgia senators showed they still had a lot of fire left in a heated debate over a bill that would reduce the state’s income taxes.
House Bill 463 would increase the standard deduction from $24,000 to $30,000 for married couples and from $12,000 to $15,000 for single filers. It exempts $1,750 of overtime and tips from income tax.
The bill would also gradually reduce the state’s flat tax rate to 3.99% from its current 5.19% in eight years.
But the tax reduction is not guaranteed. The House of Representatives insisted on revenue triggers before the deductions in the state income tax rate could take effect, said Sen. Blake Tillery, R-Vidalia.
“They would require that the next year’s fiscal revenue be more than 3% over the revenue from the year before,” Tillery said. “It would also require that net collections be higher than they were in for the three previous years and it sets a sum that deduction of the income tax cannot be such so as to put the state into a negative number based on revenue.”
The bill cuts 10 corporate tax breaks, but they do not cover the tax cuts, Tillery said.
“I can’t give you the exact dollar because they just came across the hall with a deal but I can tell you that I’m not worried about the fiscal impact because of the triggers,” Tillery said.
Sen. Josh McLaurin, D-Atlanta, said the bill is full of “falsehoods.”
“We’re talking about $6.5 billion per year in income taxes that will be cut by the time the eight years has elapsed,” McLaurin said. “I can tell you based on independent budget analysis that those credits would not cover the full $6.5 billion. It’s a completely fiscally irresponsible bill and I challenge anybody in this chamber to come up with more specific numbers than this or to explain, as the chairman admitted, we can’t at this late hour, how this hole in the budget could possibly be filled.”
Tillery said Democrats did not present their own solution.
Senate Minority Whip Kim Jackson of Stone Mountain said she did introduce a bill. Senate Bill 520, introduced in February, would have moved the state to a graduated personal income tax system, increased the standard deduction and increased the child tax credit. It never had a committee hearing.
The bill is headed to Gov. Brian Kemp’s desk after passing the Senate by a vote of 33 to 20.
Legislation that would cap property taxes at the rate of inflation failed before the General Assembly signed off in the early hours of Friday morning. The Senate rejected House Bill 1116, which also allowed cities and counties to implement a sales tax to offset revenue lost due to the property tax cut.
Both chambers agreed to Senate Bill 33, which removed the tax caps but still allows local governments to implement the sales tax. The legislation made valuation caps which required cities, counties and school boards to freeze property tax assessments to the rate of inflation mandatory. House Bill 581 passed by lawmakers in 2024 gave taxing entities a way to opt-out of the bill if they held three public hearings.
Senate Bill 33 now goes to Kemp for his consideration.