Perhaps the most important issue hanging over the heads of the General Assembly in the final three legislative days of the 2011 session is tax reform. What started out as a well thought out, although not perfect, comprehensive tax reform proposal from the Special Council on Tax Reform and Fairness for Georgians has morphed into a much narrower legislative proposal that has hit a political roadblock in the General Assembly over perceived winners and losers. In the attempt to “fix” the problems of the bill, the General Assembly runs the risk of making a bad situation worse.

The problem the General Assembly faces is the extreme difficulty of promoting tax cuts for businesses, while at the same time assuring that no individual Georgian has an increase in taxes and that the changes in law do not result in a decrease in state revenues. These may be contradictory goals and impossible to accomplish.

Ideally, tax reform should improve the state revenue base; at a minimum, however, reform should not further weaken state revenues.

Over the last three years, roughly $3 billion has been slashed from state services resulting in larger class sizes, teacher furloughs, tuition increases in our university system, and greater risk for the health and safety of Georgians. Even before the economic downturn state expenditures in Georgia were among the lowest in the nation. Georgia cannot afford additional cuts to state services.

Simplicity and revenue neutrality have been two of the guiding principles of tax reform over the past nine months. Any legislation that makes filling out state tax returns more complicated or leads to a decrease in revenues, runs counter to these guiding principles. The General Assembly should agree on legislation that modernizes and simplifies the tax system without making the fiscal crisis worse.

Alan Essig is the executive director of the Georgia Budget and Policy Institute.