Over the past few weeks, I’ve spent a lot of time talking about one of my top priorities this session: creating new jobs for Georgians. While government can’t create jobs, we can create the right environment for business to thrive and grow. The first step we must take is to provide a balanced budget that will keep our taxes low and control spending, allowing us to find new ways to spur business growth.
The facts are stark: Georgia’s unemployment rate has climbed from 4.3 percent in January of ’07 to 10.3 percent today, tying the record high for Georgia and exceeding the national unemployment rate of 10 percent. This means that more than a half-million Georgians are out of work and the number continues to grow.
Although we have our challenges, our state is weathering the storm better than most other states, we are one of only seven states with a AAA bond rating and our fiscal conservatism is going to lead us through this economic downturn. States such as California and New York are falling off a cliff with budget deficits in the tens of billions of dollars and are looking to tax everything that moves. Oregon just voted to raise its income taxes on high-earning individuals and to raise fees on businesses. These are not the kind of actions you will see here in Georgia.
Instead, you will see Senate Republicans investing heavily in making jobs a top priority amidst a struggling economy. Recently, we rolled out a jobs package for the 2010 legislative session. This newly-revised legislation includes tax incentives to create jobs for out-of-work Georgians and for businesses to relocate to Georgia. It would waive startup fees imposed by the state on new businesses, offer tax credits to companies hiring unemployed Georgians, and reduce the capital gains tax by up to 50 percent through various trigger mechanisms.
A piece included in the package that I have been pushing for includes an “Angel Investor Tax Credit.” Research proves that 80 percent of new jobs in Georgia are created from small businesses. Angel investors are individuals who write a personal check providing a boost to high-risk, early state entrepreneurial endeavors. In this current economy, it is extremely difficult for new businesses to find the capital necessary to expand and grow. Angels fill a critical role in financing and many businesses stay open and stay in Georgia because of their participation.
To encourage more Angels to invest in Georgia’s entrepreneurs, we will provide a tax credit of half of the total investment, up to $50,000. Twenty-one other states have implemented programs to incentivize Angels and North Carolina’s tax credit program alone resulted in nearly 700 new jobs with average salaries of over $58,000.
This is bigger than a simple tax credit, however; it is an investment in emerging technologies and a way for Georgia to step up its game as a major player in the bioscience and technology industries — key growth sectors for the future of Georgia’s economy. This targeted approach will lead the way to job creation as Georgia sits as one of the nation’s leaders in new discoveries and boasts unmatched research institutions. Georgia has always prided itself in being an innovator and this strategic focus on our intellectual assets will reap rewards.
In fact, we’ve seen it already. One Georgia company, Internet Security Systems, was saved from closing its doors because of an Angel investor.
And a few years later, sold their business for millions to IBM. I believe we can see more success stories just like this if we make this piece of legislation a priority.
Our economy will recover and businesses will expand again. By proactively enacting these incentives, Georgia will be positioned as the destination for job creation.