Ga. House Democrats seek to privatize sales tax collections

Wed, 02/11/2009 - 4:00pm
By: Cal Beverly

Rep. Virgil Fludd (D-Tyrone) writes bill he says will add to the state’s coffers without a tax increase

ATLANTA – Democrats in the Georgia House of Representatives this week introduced HB 356, a revenue bill designed to put additional funds into the state’s shrinking coffers by streamlining government and improving the sales tax collection process, according to a news release from House Democratic leadership.

The bill, written by Fayette County Rep. Virgil Fludd (D-Tyrone), transfers control over collecting sales taxes from the state Department of Revenue to local governments, allowing them to contract with private firms. Similar plans have been tried in other states, notably Alabama, which saw a revenue increase of over $1 billion.

“Every year, the Department of Revenue leaves money on the table in uncollected sales taxes,” said Fludd. “We’re facing an economic crisis in Georgia, and this is the time to stop leaving money on the table and scale down government spending where we can. Consumers are paying sales taxes in good faith, and we need to make sure that those tax dollars are going to work for the people of this state.”

“This is a plan that Georgia families can get behind,” said House Democratic Leader DuBose Porter (D-Dublin). “We’re talking about sales taxes paid by consumers in Georgia that, for a variety of reasons, don’t make it to the state and local governments. This bill empowers local governments, streamlines government and makes it more efficient to those it serves, and most importantly, puts money back in the budget and mitigates the need for destructive and counterproductive across-the-board cuts.”

“This is a fiscally responsible way to mitigate our budget crisis,” said House Democratic Caucus Chair Calvin Smyre (D-Columbus). “We’re putting money into the state’s bank account, and doing it without raising taxes.”

According to the Democratic news release, HB356 will:

• Put money into state coffers, without raising taxes. “HB 356 makes the sales tax collection process more efficient, essentially picking up sales tax revenue owed to the government, but left on the table.”

• Produce a streamlined government. “By putting the collection process in the hands of local government, we’re cutting down on the state’s role in collections, and slimming down state government, cutting costs.”

• Empower local governments. “Under our plan, we’re breaking up the state’s monopoly on tax collections, and empowering local governments to partner with the private sector for lower administration costs and more efficient results. Our plan also gets local sales tax revenues back to local governments faster. Instead of having to wait weeks for revenues to work their way through state bureaucracy, local governments can get sales tax revenues much faster.”

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Submitted by eldergent on Sat, 02/14/2009 - 6:41pm.

A friend of mine, second generation Puerto Rican, from New York's Hell's Kitchen told me "anytime, anyone tries to talk you into anything - they're getting ready to screw you". More often than not, I've found out he was right.

Submitted by mysteryman on Sat, 02/14/2009 - 6:05pm.

So funny....

cowtipn's picture
Submitted by cowtipn on Thu, 02/12/2009 - 11:52am.

Wouldn't be surprised if Rep. Fludd had a close friend or family member that happened to own a tax collection business. If only I had some time, I'd look into it.


Submitted by Spyglass on Fri, 02/13/2009 - 12:01pm.

trust Virgil as far as you can throw him.

Submitted by Claude Y Paquin on Thu, 02/12/2009 - 8:31am.

What I read in this article is that (1) there are people, presumably merchants, who collect sales tax from consumers and then “for a variety of reasons” do not remit the tax to the State of Georgia, and (2) local governments are thought to be better able to collect what the state cannot.

In a recent article published in The Citizen [Dec. 24, 2008], I alluded to sales tax collection problems when I wrote about the sales tax sausage factory. Just as there’s many a slip betwixt the cup and the lip, there can be ways for sales tax money to slip through the cracks on its way to the state. The greater the sales tax, the greater the risk.

No one is better equipped than the state government to collect sales tax. If merchants do not remit the sales tax they collect, the “variety of reasons” needs to be laid out one by one and worked on. Once you know the reason you can work on it.

Some of our citizens wanted to privatize Social Security. To a large degree we have privatized healthcare insurance now, and I don’t yet “feel the love” for insurance companies, which have repeatedly been found to devise schemes to cheat both doctors and patients and agree to pay millions and millions of dollars in settlements when they are found out.

Every once in a while we find a municipal court employee who manages to keep some of the money collected for the court.

Privatization is no panacea, and what the state with all its resources can’t do, local governments can’t do better.

Tell us in detail about the “variety of reasons,” and then we’ll talk.

Submitted by mysteryman on Wed, 02/11/2009 - 10:15pm.

The commissioners squander all of the local sales tax revenue to rob Peter to pay Paul, smells fishy to me, and as for contracting with private collections agencys to collect from the hold outs, i wonder how much savings will be recognized. We could probably assign this as a high school economics class project and have a better balance sheet than if the county were to have a crack at it, judgeing from the current state of affairs.......NYCE...

DarkMadam's picture
Submitted by DarkMadam on Fri, 02/13/2009 - 2:55pm.

What do you say that we submit the latest Budget for PTC to a local high schools economics class and see what they can do with it before we let the City Manager Bernie and the Council does anything! I like this better and better!


WakeUp's picture
Submitted by WakeUp on Wed, 02/11/2009 - 9:40pm.

Are you nuts?


Submitted by mysteryman on Wed, 02/11/2009 - 8:17pm.

You of all people are from the Town Of Tyrone where they cannot even fill out a balance sheet, or balance the checkbook. So im sure local govts mouths are watering at your proposed buffet of the sales taxes, we have already seen how irresponsible our commissioneers have been with the local budgets, god help us all.....PEACE

wildfire's picture
Submitted by wildfire on Fri, 02/13/2009 - 10:23am.

Virgil Fludd is NOT from Tyrone. He along with MANY others are fleeing the crime waves in Fulton and Clayton Counties and he moved here to be safer as well as better schools for his kids. I know Mr. Fludd and we agree on about.... NOTHING. If he is making any proposal on tax collections, there is something lurking below I assure you. His agenda is to put money into the hands of non-tax payers, promote abortion and homosexual rights, PERIOD.


diva's picture
Submitted by diva on Sun, 02/15/2009 - 8:06pm.

Can you tell us how he will institute "His agenda" "to put money into the hands of non-tax payers, promote abortion and homosexual rights, PERIOD"?


G35 Dude's picture
Submitted by G35 Dude on Wed, 02/11/2009 - 4:51pm.

This almost sounds too good to be true. Next step, maybe the government will look at a fair tax plan? Hmmmmmmm..........


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