Georgia manufacturers defend tax incentives

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Leaders in Georgia's manufacturing industry defend the state's tax incentives.

Credit: Capitol Beat News Service

ATLANTA — Georgia manufacturing executives and a local economic developer defended the state’s tax incentives Wednesday to a legislative committee formed to determine whether Georgians are getting a healthy return on the revenue lost to tax credits and exemptions.

“We have been successful in the state of Georgia because of the tax policies we have,” Missy Kendrick, president of the Rome-Floyd County Development Authority, told members of the General Assembly’s Joint Tax Credit Review Panel meeting in Rome.

House Speaker Jon Burns, R-Newington, formed the committee in March to take a look at all of Georgia’s tax incentives and determine whether they’re accomplishing the corporate investment and job creation for which they were intended. 

At the panel’s opening hearing in June, supporters of Georgia’s film tax credit — by far the most expensive tax incentive the state offers — defended it as a major contributor to the success story of the state’s film industry, which has grown exponentially since the credit was adopted in 2008.

On Wednesday, it was Georgia manufacturers’ turn to urge the committee not to tamper with tax credits and exemptions that have helped their industries expand their presence in the Peach State.

The General Assembly adopted legislation a decade ago exempting inputs used in manufacturing — including energy — from sales taxes. At the time, only eight states were not offering the exemption, said Clay Jones, vice president and general counsel for the Georgia Association of Manufacturers.

“We don’t want to put our manufacturers at a competitive disadvantage,” he said.

Ballard Betz, president and CEO of The Lewis Chemical Co., a Rome-based manufacturer with 70 employees in four Georgia counties, said the sales-tax exemption is critical to his company staying afloat amid intense foreign competition.

“We cannot afford to give foreign companies an undue advantage over domestic manufacturers,” he said.

The committee also heard the other side of the tax incentives argument Wednesday from Nick Stark, director of tax and fiscal policy for the American Legislative Exchange Council, an organization of state legislators that advocates limited government and free markets. He said broad-based tax cuts are a better way to drive business growth than tax incentives aimed at specific industries.

“The government doesn’t know how to pick winners and losers,” Stark said. “A better overall tax system with lower rates is a better incentive.”

Kendrick praised the formation of the tax review panel as a move toward fiscal responsibility and responsible government and said she’s confident the tax incentives Georgia offers to manufacturers will prove their benefit. She urged the committee not to do anything that would hurt Georgia manufacturers’ ability to compete.

“These other states are watching what we’re doing … waiting on us to make changes that impact our ability to remain the No.-1 state in which to do business,” she said. “These tax incentives really do make a difference.”

This story comes to GPB through a reporting partnership with Capitol Beat News Service.