The Tax Foundation’s August 2008 report, shows Georgia now ranks 21st in the country in state and local tax collections for 2008, a jump of 20 places. Being 21st means that 20 states have a higher total state and local tax burden than Georgia. This measurement is on a per capita basis that admittedly favors states that are growing income the fastest but also those that are limiting growth of taxes. Alabama is 42nd, Florida is 25th, North Carolina is 20th, South Carolina is 40th, and Tennessee is 47th, so there is a wide range of rankings in the South. All figures are per capita.
What is the state-local tax burden?
The combined state and local tax burden for Georgia citizens is 9.9 percent, again 16th highest in the country, although there are about 15 states clustered around 9 percent-10 percent. The highest tax burden in the country, not surprisingly, is New Jersey at 11.8 percent, along with New York at 11.7 percent and Connecticut at 11.1 percent. The national average is 9.7 percent, so Georgia is slightly above that average. Better than Georgia is Florida at 7.4 percent, Tennessee at 8.3 percent, South Carolina at 8.8 percent and North Carolina at 9.8 percent. So Georgia, in this measurement is marginally higher than other Southern states.
Several factors appear to have helped some states lower tax burden. Rising income is a major factor and there is an issue with the comparison of taxing in-state and out-of-state residents which the Foundation believes must be taken into account as well. In fact, the lowest tax burden states all have established systems that tax out of state residents substantially more than residents.
Taxes on tourism and vacation homes are two of the factors. For example, Georgia collects $2,579 of the total state/local tax collections of $3,612 from residents (25th) and the balance, $1,033 (43rd) from out of state residents. Some other states have by comparison a higher ratio of out of state residents carrying the tax load. Taking these factors into account, Georgia ranks in the middle, about 25th.
Total collections across the country by state appear to have increased by about 2.4 percent over 2007 totals. When the $1.6 billion decrease in the 2009 budget is taken into account, the state funds budget of $17.4 billion is about the same state budget level as prior to the 2007 budget — amazing considering the pay raises and other budget additions such as workers compensation rates and rent increases.
Constitutional amendments on the November ballot
A total of three state Constitutional amendments will be considered by Georgia voters in November. Here is a review of the amendments:
The order of appearance will be decided by the governor, speaker of the House and lieutenant governor.
Tax allocation districts — TAD — allows these districts to use education ad valorem taxes previously struck down by the courts.
(House Resolution 1276) Large Conservation Use Forest Amendment — Would allow conservation use compacts on 200 acres or larger tracts for minimum 15-year periods but could continue to be used for timber growing.
The third amendment has to do with allowing local governments to create infrastructure development districts that would allow developers to fund infrastructure improvements with tax proceeds from the development. These are typically located in blighted areas.
For more: TaxFoundation.org (Special Report USSN 1068-0306)
This column will look at the division between local and state tax growth over the next few weeks.