When your humble flinger of arrows climbed into his pickup truck one afternoon in the late summer of 2010, it was not dreamed that the trip was worth $4 million to $5 million to the people of Augusta Richmond County, Georgia, yet it was.
The Georgia General Assembly had empaneled a Tax Reform Council, chaired by former Atlanta Olympic Games chairman A.D. Frazier, and charged it with recommending a tax reform plan. Earlier, in 2008, the legislature had wisely rejected disgraced House Speaker Glenn Richardson’s G.R.E.A.T. (Georgia Repeal Every Ad valorem Tax) plan, but still held the notion of “tax reform” dear, spurred on by the Georgia Traditional Manufacturers Association and others. Manufacturers wanted relief from Georgia’s sales-tax-exemption-limiting “Direct Use” requirements. Agricultural interests wanted sales tax relief, too.
The Tax Reform Council met in cities across Georgia. The meeting in Augusta came within 3 weeks of a furious Republican Party runoff for governor, which diverted attention from what was at risk. The Council convened at the Doubletree Hotel on August 30, 2010. A number of presenters had prepared remarks which were posted on the Tax Council website. This writer had not come to speak, but rose and gave an impromptu talk in opposition, based upon the enormous revenue loss that appeared to be in the making, including a critique of surviving elements of G.R.E.A.T. A sitting member of the Georgia House of Representatives, Don Parsons, was not paying attention enough to catch the name and dismissed the talk as uninformed.
The frightening thing was that the Tax Council withheld its report, despite promises it would be published in November, until the start of the 2011 session, and the stated intent was for the plan to rocket through the General Assembly for a straight “up or down” vote.
The Augusta presentations included one that tipped off how draconian the sales and use tax losses would be for Augusta. An email to a key member of the Augusta Commission warned of the losses. Another to an organization promoting the bad tax deal laid out the reasons that killing it in 2011 were good.
Lobbyists didn’t care.
The Augusta Chronicle reported, “Twice panel members asked how to replace the revenue from new tax breaks such as elimination of the inventory tax. John Krueger, senior vice president of the Georgia Chamber of Commerce, replied that he hadn’t polled his members about that.
“To be honest, I really don’t have an answer to that,” he said.”
The next year tax reform returned and passed. Not one of the location legislative delegation voted against it, not even “conservative” Representative Barbara Sims or Senator Bill Jackson. Just as night follows day, the tax losses hit Augusta Richmond County so hard that in 2014 the Augusta Commission had to pass a 22% property tax increase to compensate for them.
The Augusta Commission got the blame, but the damage was clearly inflicted by the General Assembly, with the local delegation going right along with it.
The sales taxes given up were were being passed on to purchasers of the manufactured goods outside of Augusta, Richmond County, and now are being replaced by your property taxes, if you live in Augusta-Richmond County. The manufacturers were not likely to leave Augusta over taxes they had been paying for years, and “tax reform” means that new businesses won’t be paying new taxes, either. Theories and subsidized jobs excited the politicians, but this was a DEAD LOSS to the people, if one looks at the only thing that counts with revenue – CASH FLOW!
The entire progression of events might not have turned to the public’s favor, but it was a wonderful chance to demonstrate how The AURELIUS PRINCIPLE works to identify millions of dollars of savings to clients who might just be interested in saving those millions rather than paying them out. Cost Recovery Works, Inc. has used these techniques to stunning effect for clients many times, and the tax reform participation showed how they work to potentially effect tens of millions in savings.
Millions of dollars in savings come from projects like this one – Just not for the poor, tax-besieged citizens of Augusta.
Thank your politicians.