The Georgia Senate passed its first bill of the 2021 legislative session Monday, unanimously backing legislation calling for auditing up to five tax credit programs each year.
The bill, sponsored by state Sen. John Albers, R-Roswell, aims to curb wasteful loopholes in the state’s tax structure. It would appoint outside auditors to scrutinize the chosen tax programs on request from certain General Assembly committee heads.
“We can continue to solve so many challenges to a balanced and proactive approach to having sound fiscal policy and keeping people working,” Albers said. “This is good policy and it’s the right thing to do.”
The bill now heads to the Georgia House of Representatives.
State senators passed Albers’ bill last February before it was sidelined by the COVID-19 pandemic. The legislature shut down for three months in mid-March as several lawmakers took ill with the virus.
An earlier version of the bill was passed in 2019 but died on Gov. Brian Kemp’s desk. Kemp vetoed it for not giving the budget office the ability to contract with independent auditors to complete the audits.
Albers’ current bill stems from a Senate study committee report in 2017 that found shortcomings in how the state monitors whether a given tax incentive is spurring business and job creation as it was intended to do.
State lawmakers may take another stab at scrutinizing tax incentives during this year’s session. Senate Finance Committee Chairman Chuck Hufstetler, R-Rome, said last week lawmakers plan to propose a two-year study focusing on potential areas to trim the fat from Georgia’s entire $9.5 billion tax-incentive structure.
The deeper dive on tax incentives comes as lawmakers look to plug holes in the state’s $26 billion budget following substantial spending cuts last year due to the pandemic. Budgets for state agencies are poised to stay flat this year with no new cuts or spending increases.
Some budget analysts have called for raising the state’s tax on tobacco from 37 cents a pack up to the national average of $1.81, potentially bringing in $700 million in revenue per year. Lawmakers largely avoided talks of raising the cigarette tax during last year’s pandemic-struck session.