Wednesday, February 17, 2010

62. DuBose Porter: Fights the Revenue Department for your money.

CRAWFORD / Lawmakers should go where the money is Tom Crawford
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 that covers government and politics in Georgia. He can be reached at

DuBose Porter
Fighting for you to get your money.
Vote in the Democratic Primary July 2010