10. Furloughing teachers and state employees was a choice: What you need to know about your government

2009 session--House Bill 356, the “point of sale” bill gives local governments the right to collect sales taxes locally at the point of sale. Alabama made the change and found $1 billion of lost sales tax. Georgia’s elected Republican leadership, on the other hand, chose to let HB356 die in committee. They chose instead to increase property taxes, furlough teachers and state employees, and keep law enforcement at record lows when those are the very things that enhance economic development and attract industry and jobs. Why? Because HB356 actually creates local control, something state politicians love to run on when campaigning but run from when elected. Politicians fear local control, because sharing control also means sharing power. Instead of giving up a little power and reaching out to partner with local governments, Georgia officials decided to keep an outdated system of collecting sales tax and let $1 billion of your money — money you have already paid — just “fall through the cracks.”

Also here is a blog entry I wrote on
Thursday, March 11, 2010 when I was campaigning for DuBose.

DuBose Porter: Revenue Department still not ready to give you your money.

Tom Crawford wrote an article explaining the problem with the cheaters who take your paid sales tax money and keep it for themselves instead of returning it to you (that article found below this story). An excerpt follows:
CRAWFORD / Lawmakers should go where the money is http://www.charltoncountyherald.com/articles/2010/02/16/opinion/editorials/doc4b7abcc8cfbbe844297319.txt

By Tom Crawford
Georgia loses buckets of tax dollars every year because of retailers who charge the sales tax on their customers but keep the money rather than send it to the revenue department. This problem is well known to lawmakers and revenue officials, but they haven’t done much to deal with it.

A pilot program in Hall County uncovered the fact that nearly 1,000 businesses in that county do not have sales tax numbers, which means they are not reporting their sales tax collections to the state. There are several hundred businesses that do not have a business license from their local government.

House Minority Leader DuBose Porter (D-Dublin) and his Democratic colleagues have been trying in vain for more than a year to pass legislation that would crack down on these renegade businesses who are cheating the state of sales tax proceeds.


Now another reporter, Jay Jones of the Rockdale Citizen, has published another story that shows the the reality that Georgia's elected Republican leadership and Georgia's Republican appointed Revenue Commissioner Bart Graham are refusing to give you back your money:


Excerpts follow from:

Porter says collect taxes in a new way (Rockdale Citizen)

CONYERS — Democratic candidate for Georgia governor DuBose Porter said his proposal to collect sales taxes from “cheaters” could reap millions for the strapped state budget and questioned why current state leaders have failed to act on it rather than offer new cuts.
Reporter: Jay JonesEmail Address: jay.jones@rockdalecitizen.com

State Rep. DuBose Porter, D-Dublin, speaks to the Bar Association of Rockdale County on Friday. The 28-year legislator is running for governor in the Democratic primary.

CONYERS — Democratic candidate for Georgia governor DuBose Porter said his proposal to collect sales taxes from “cheaters” could reap millions for the strapped state budget and questioned why current state leaders have failed to act on it rather than offer new cuts...

“I say before we start cutting education and raising taxes, let’s get what we should get from the cheaters,” Porter said. “This would be a GPS system telling you who’s cheating.”

As the state minority leader in the Georgia House, Porter, D-Dublin, got a pilot project done in Hall and Lowndes counties last year that showed that a quarter of all business licens e-holders had not paid sales taxes. The proposal is now in the General Assembly as House Bill 1137.

Porter added the state’s Department of Revenue had been against the proposal. “Either they are incompetent, hiding something or protecting somebody. I don’t know,” he said. Porter said the proposal could also help counties in finding businesses that have a sales tax certificate but not a business license.

In an editorial to the Atlanta Journal-Constitution, Department of Revenue Commissioner Bart Graham discounted Porter’s amount of $1 billion lost from cheaters. Also, Graham countered that part of Porter’s proposal that would allow counties to privatize tax collections would expose a businesses’ tax records.

Porter said during Friday’s luncheon that the Department of Revenue under its current system is unable to account for sales tax collections that exceed what was designated for the counties in local sales tax revenue receipts. Now, any unaccounted sales tax received is put into the state’s treasury. Porter said that while the state gets its 4 percent of sales tax, the counties with their 1 percent sales taxes are the ones that suffer from the loss of unaccounted tax revenue...

To read the whole story click here:
http://www.rockdalecitizen.com/newtonhome/headlines/86734157.html


Here is the story referenced above
from another blog post I wrote

Wednesday, February 17, 2010

CRAWFORD / Lawmakers should go where the money is

http://www.charltoncountyherald.com/articles/2010/02/16/opinion/editorials/doc4b7abcc8cfbbe844297319.txtBy Tom Crawford
Published:
Tuesday, February 16, 2010 11:40 AM EST

Little by little, the money keeps disappearing from the state budget.

Georgia legislators have had to delete $1.2 billion from the current year’s budget because the recession has killed tax revenues. Lawmakers will have to reduce the budget for next fiscal year by a similar amount because the recession still shows few signs of ending anytime soon.

Who suffers the most when state spending is cut by such large amounts? Public education has consistently taken the biggest hit. At the urging of Gov. Sonny Perdue, the Legislature has cut more than $2 billion in state funding to local school systems for grades K-12 since 2003.

Those reductions continued in the revised state budget that the House approved last week. The amended budget cuts another $281 million in Quality Basic Education (QBE) funds that the state would normally send to local schools.

If the state’s public school system is to be kept intact, this cutting cannot go on much longer. Is there a way, short of passing a tax increase, to raise the money needed for education?

As it turns out, there is a solution staring legislators right in the face.

Georgia loses buckets of tax dollars every year because of retailers who charge the sales tax on their customers but keep the money rather than send it to the revenue department. This problem is well known to lawmakers and revenue officials, but they haven’t done much to deal with it.

A pilot program in Hall County uncovered the fact that nearly 1,000 businesses in that county do not have sales tax numbers, which means they are not reporting their sales tax collections to the state. There are several hundred businesses that do not have a business license from their local government.

House Minority Leader DuBose Porter (D-Dublin) and his Democratic colleagues have been trying in vain for more than a year to pass legislation that would crack down on these renegade businesses who are cheating the state of sales tax proceeds.

“Our bill will stop the tax cheaters and get the money where it ought to go,” Porter said.

Based on the results of the Hall County program, Porter estimates that unreported sales taxes for the whole state could amount to as much as $1 billion. This is not a tax increase: this is money that the businesses are already required to collect and send to the state.

Revenue Commissioner Bart Graham gets irritated whenever his agency is criticized and claims that the estimate of $1 billion in uncollected taxes is much too high. But even Graham concedes that somewhere between 5 percent and 10 percent of Georgia’s sales tax proceeds are being evaded. That conservative estimate would still amount to $250 million to $500 million a year.

That amount of money could make up for the major cuts in state funding to local school systems, and then some.

There have been indications in recent weeks that legislative Republicans could be ready to join their Democratic colleagues and take action to collect these delinquent taxes. Bills have been introduced by lawmakers from both parties to set up a system that would cross-check sales tax and business license data to identify retailers who are not turning over tax proceeds as the law requires.

Legislators have also come to the realization that you have to have tax collectors before you can actually collect taxes. The revised state budget includes money for the revenue department to hire six investigative agents and four financial analysts for its fraud detection group, which means there will be more people to go after tax cheats.

That’s a good start. The next step is for lawmakers to get moving and adopt this legislation so that Georgia can start collecting taxes that are long past due.

The General Assembly can move fast when it comes to legislation that has no relevance for its constituents. The Senate has already adopted a bill that would make it illegal to implant microchips in people, even though the bill’s sponsor, Sen. Chip Pearson (R-Dawsonville), could not cite a single instance where any person in Georgia was ever forced to undergo such an implantation.

If legislators would only move that quickly to go after tax cheats, the state and its school systems would be in much better shape.

• Tom Crawford is the editor of Capitol Impact’s Georgia Report, an Internet news service at www.gareport.com that covers government and politics in Georgia. He can be reached at tcrawford@capitolimpact.net.