Georgia at a Crossroads: Keep Sliding Backwards with Status Quo or Move Forward with Balanced Approach

GBPI’s new report, State of Working Georgia 2011, paints a troubling picture of how everyday Georgians are faring in today’s economy. Over the past decade and especially since the downturn of 2007, working Georgians have faced massive job loss, rising unemployment and persistent inequality—and things appear to be getting worse.

As outlined in the report, Georgia fell from the 7th highest rate of job growth in the ‘90s to the 36th lowest in the ‘00s, a trend made worse by the Great Recession and jobless recovery. More than a quarter million Georgians lost their jobs between December 2007 and June 2009, with another 80,000 disappearing during the so-called “recovery.” All in all Georgia has lost 351,400 jobs – third most nationwide – since the crisis began, and ranks dead last in job growth since the official start of the recovery in June 2009.

Despite consistently lagging behind on social indicators like poverty and educational attainment,Georgia has long taken solace in our robust growth and job creation. We’ve rightly been pleased with our (mostly) consistent economic expansion, evidenced by trends like healthy job growth in the ‘90s and rapid population growth to date. The hope has always been that eventually the rising tide would benefit everyone, collectively lifting every Georgian’s boat to greater prosperity and economic security.

The crash of Georgia’s jobs market has put that hope to rest.Georgia’s now not only a relatively impoverished and poorly educated state, it’s a slow growth state too. It’s clear that our leaders must act, but the question is, how?

Georgia is at a crossroads. Down one path lies our outdated model of the past, which at its core says that if you cut taxes as low as they’ll go and slash state services to their bare bones – while occasionally luring new companies through expensive, taxpayer-funded subsidies – your state will explode with jobs and growth. The problem, unfortunately, is that model simply doesn’t work. It’s a model that’s contradicted by the overwhelming body of evidence on what makes state economies thrive: a balanced mix of strong public services, high quality of life, an educated workforce and a competitive, equitable tax system. As a U.S. Chamber of Commerce report recently put it, “A state can neither cut nor tax itself into prosperity. Weak public infrastructure combined with low taxes has failed through history to create strong state economies, as was long the case in the Southeast.”

Of course that hasn’t stopped Georgia from trying, especially recently. It hasn’t stopped policymakers from endlessly obsessing over tax cuts while ignoring the core building blocks of growth.

But there is another path, one that Georgia’s leaders could easily take—investments in infrastructure that create new jobs and drive future growth; support for entities like technical schools and the Georgia Research Alliance that foster innovation, entrepreneurship and a 21st century workforce; renewed commitment to world-class education from pre-K through college. And leadership that puts aside the distracting ideological fights like immigration “reform” in favor of bipartisan action on jobs.

A hurdle to that approach, however, is Georgia’s significant lack of revenue (the PeachStateranks 49th nationally in how much revenue it collects per resident). That’s why comprehensive tax reform should remain high on the state’s agenda, though special care must be given to getting that reform right.  New revenue may sound scary to some, but if done reasonably a reformed tax system would minimally impact the majority ofGeorgia taxpayers, while providing the revenue we desperately need for investment and growth.

State of Working Georgia 2011 paints a startling picture, but come January lawmakers have a chance to act. They should do so decisively, but also sensibly. They should acknowledge not only the task we face, but also the areas whereGeorgia’s taken the wrong road. If we want to grow for the future, then we need to accept the lessons of the past and chart a stronger, balanced course toward renewed prosperity for all.

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5 thoughts on “Georgia at a Crossroads: Keep Sliding Backwards with Status Quo or Move Forward with Balanced Approach”

  1. Well, you are right, of course. All of these themes were laid out clearly in the Georgia Tax Council report which we presented to the Legislature on January of this year.

    Even with a “revenue neutral” standing, endorsed by Grover Norquist…our legislature was unable to grapple with the assortment of tax proposals necessary to creates true tax REFORM. The “no new tax pledge” is a blunt instrument that takes away the opportunity for statesmen legislators to use their judgment and do what’s good for our State.

    Take another look at our report. The facts speak for themselves.

    A. D. Frazier
    Chairman, Georgia Tax Council

    1. Thanks for the feedback A.D.! We agree the Tax Council took a thoughtful, balanced look at Georgia’s challenges and laid out a strong case for reform that moves us forward. Hopefully the legislature will return to that proposal as the starting point when tax reform comes up again this January.

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