May 5, 2013

David Pennington: Expanding the girth of state government


— Despite the tough times in Georgia, our leaders keep expanding state government by centralizing more power in Atlanta, spending more of our tax dollars and increasing our taxes. The state-funded portion of our budget has grown from $17.4 billion to $19.9 billion in three years. Significant taxing authority has been transferred from our elected representatives to unelected individuals. New commissions, advisers and departments swell the bureaucracy. Consider the following.

Education: Our state Board of Education is appointed by the governor, as is the governor’s education policy adviser. Additionally, there is the Governor’s Office of Student Achievement and, most recently, a State Charter Commission with members nominated by the governor,  lieutenant governor and speaker of the House. Seven state education agency leaders comprise the Alliance of Education Agency Heads, begun in 2006. The first of their goals is increasing Georgia’s high school graduation rate. If this expansive bureaucracy worked, our graduation rate would rank higher than 48th nationally.

Transportation: The Department of Transportation is the largest of Georgia’s transportation agencies spending more than $2 billion of our tax dollars annually. For years they have been beset with financial management problems resulting in multiple annual audits detailing material deficiencies. But the DOT is only one of six state transportation agencies. When the executive director of the State Road and Tollway Authority recently resigned, the opportunity should have been used to identify organizational streamlining, process improvement and cost reduction opportunities. But the board, chaired by the governor, named a new executive director.

The American Society of Civil Engineers gave Georgia’s infrastructure a grade of C-minus with 19 percent of Georgia roads rated mediocre or poor. Driving on these roads in need of repairs costs Georgians $374 million a year. The state transportation bureaucracy is not working well.

Medicaid taxes: The “bed tax” bill renewed a tax marketed in 2010 as a three-year stopgap measure to address recessionary tax collection shortfalls. So this $240 million tax burden will continue to be borne by businesses with the prospect that it could rise to $1 billion. But our elected representatives won’t consider and vote on increases because they allowed a board to assume their taxing responsibility. This further increases the governor’s power since he appoints the board.

Vehicle taxes: The “birthday tax” bill, which on first blush excited many Georgians, actually raises taxes and reduces local control. The 6.5 percent tax automatically increases to 7 percent in 2015. Subsequently, an unelected revenue commissioner can raise the tax to a maximum of 9 percent if revenues fail to meet projections. The clumsy implementation of this tax has created confusion and frustration. According to Bill Morie, president of the Georgia Automobile Association that backed the bill, it is an “administrative nightmare.”

GPTV: Despite Georgia’s economic woes, our leadership found money to expand GPTV. After abruptly resigning from the Senate, Chip Rogers was named executive director for the Georgia Works initiative. Georgia taxpayers, not contributors to GPB, pay his $150,000 salary. A veteran Georgia Public Broadcasting producer resigned in protest after learning his salary was nearly three times her own.

Venture capital investments: The icing on the cake is the expansion of state government into the venture capital business with $100 million of taxpayers’ dollars on the line. The governor, lieutenant governor and speaker of the House will each appoint a member to the “Invest Georgia Board.” Georgia’s last foray into the venture capital minefield was a $6 million investment in Range Fuels, which closed in 2011. Georgia should promote venture capital investment by reforming our uncompetitive tax code, not by gambling Georgians’ hard earned tax dollars in the riskiest form of investments.

Why is our leadership expanding state government? Why are they giving taxing authority to unelected bodies? Why isn’t Georgia embracing the bold changes necessary to catalyze business expansion? Growing government bureaucracies choke private enterprise — the engine that creates jobs, reduces poverty and gives hard-working Georgians a real shot at financial security and the peace of mind it provides.



David Pennington is the mayor of Dalton.