When state Sen. Chuck Hufstetler became chairman of the Senate Finance Committee in January 2017, he immediately spoke of the need to look at Georgia’s outdated revenue and tax structure “to see if it’s the best for taxpayers and the state.”
The Rome Republican had the credentials for his new job, beginning his third two-year term in the Senate after serving as a Floyd County commissioner and chairing its finance committee for six years. Remarkably, during his tenure the county earned its first AA bond rating in modern history — and the tax rate went down while the general fund balance increased.
Upon taking the Senate committee helm, Hufstetler acknowledged that finance “was perhaps my biggest contribution at the county level and that this was a good fit for me at the state level.” This was confirmed when the senator took on the challenge of tax reform in the 2017 General Assembly, calling for major changes in the tax code and pushing for cuts for all taxpayers, “from richest to poorest.” Under his leadership, that’s exactly what the Senate Finance Committee did, merging different bills passed by House and Senate. But with time running out in the 2017 legislative session, the two chambers deadlocked on a final bill, leaving the task to this year’s General Assembly.
Hufstetler stayed on the job along with his House counterpart, Rep. Jay Powell, R-Camilla, other Republican legislative leaders, Gov. Nathan Deal, Lt. Gov. Casey Cagle and House Speaker David Ralston. Their efforts were given major impetus by enactment of the $1.5-trillion federal tax cut legislation which meant Georgia potentially would get a windfall of about $5 billion a year with an unintended consequence of hitting many state taxpayers with higher bills. State law required taxpayers claiming standard federal deductions to do the same on their state taxes, but many were counting on using itemized deductions on 2017 returns to reduce their liabilities. That, Hufstetler rightly said, would “put some people in a penalty situation.”
The problem, along with other issues, was resolved when both House and Senate approved HB 918 which eliminated the windfall, cut income state taxes by $1.2 billion a year and doubled the standard deduction. Tax cuts range from 16 percent for a family of four earning $50,000 to 10 percent for the $150,000 earners. The bill doubles the standard deduction this year from $2,300 to $4,600 for individual filers and from $3,000 to $6,000 for married joint filers. Starting in 2019, the top income tax rate will dip from 6 percent to 5.75 percent and to 5.5 percent in 2020.
It’s a triumph for Georgia taxpayers. “This is the first income tax decrease in the history of Georgia,” Hufstetler said at a news conference. “And it’s a true middle-class tax cut.” He pointed out that nearly half of Georgians earn $50,000 or less and the bill provides an income tax break for every bracket. Gov. Deal said the bill “will save taxpayers more than $5 billion over the next five years.”
To say it was about time taxes were cut would be an understatement. The standard deduction was last increased in 1981. The individual rate was set at 6 percent in 1937 and has not changed since, while the corporate rate has also remained at 6 percent since 1969.
One of the controversial issues injected into the legislative debate on HB 918 was a $35 million jet fuel tax exemption, primarily benefiting Atlanta-based Delta Airlines, and many legislators including Hufstetler opposed the exemption. Originally, the Rome senator went along with a compromise approving the Delta tax break to preserve the historic individual tax cuts. But after Delta severed its relationship with the National Rifle Association in the aftermath of the Florida school massacre, sentiment among Republicans turned decidedly against the fuel tax break and it was eliminated from the final bill with Hufstetler joining the majority on that issue.
Now, finally, there will be tax cuts for hard-working Georgians, thanks in no small measure to the determination and leadership of Rome’s own Chuck Hufstetler, who deserves kudos for a job well done! Keep up the good work for Georgia taxpayers, Senator.