Georgia lawmakers this year dressed themselves as Santa Claus to hand out tax cuts to manufacturers.
But because much of the revenue from those taxes would have gone to local coffers, they’re forcing county commissioners and city officials across the state to play the role of Grinch to get the money back.
The issue arose in Columbia County Tuesday when commissioners started discussions on implementing an excise tax on energy consumed by manufacturers. The law granting the exemptions allows local communities to impose the energy tax to recoup the revenue.
Of the 7 percent Columbia County charges in sales tax, 4 percent goes to the state; 1 percent goes to the Special Purpose Local Option Sales Tax, or SPLOST; 1 percent goes to the Local Option Sales Tax, or LOST; and 1 percent is for the education sales tax, or E-SPLOST.
Lawmakers didn’t touch E-SPLOST. But in addition to the state sales tax cut, the exemption eliminates the 2 percent that goes to SPLOST and LOST.
Manufacturers are thrilled at the prospect of their sales tax expense dropping 6 percentage points next year, and don’t want counties to impose the 2 percent excise tax. That’s just unrealistic.
For taxpayers accustomed to seeing red when they hear about any new tax, keep in mind: SPLOST spending is voted on by citizens, and used on a list of projects they approve. The state’s exemption cuts directly into funding for those items – for roads, facilities and other quality of life projects. Likewise, half of LOST funds county operations, while half offsets property taxes.
The exemption makes lawmakers look generous, but at the expense of local communities. By creating the energy excise tax to offset the loss but requiring each community to decide whether to impose it, lawmakers are forcing local governments to appear unfriendly to business by imposing the tax or slashing local projects if they don’t. Without the excise tax, Columbia County faces a $250,000 annual shortfall for already-budgeted projects.
Unfair? Of course it is. But commissioners will have to play the hand they’re dealt, even if that means looking like the Grinch.