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State tax overhaul said to be dead for session
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ATLANTA — Tax changes that Republicans had promoted as a key part of their agenda are dead for this legislative session.

House Speaker David Ralston told reporters at the state Capitol on Monday that he yanked the bill after losing confidence in data provided by Georgia State University economists showing who would benefit from the revamped plan. It would have lowered the personal income tax rate and slapped a sales tax on some new goods and services.

The GOP had promoted the tax plan as a way to help create jobs.

Ralston, of Blue Ridge, said the work on tax changes will continue and the legislature could take up the issue during a special session this summer that will tackle redistricting or during next year's session.

"Tax reform is not dead, tax reform is delayed," Ralston said.

Monday was the last day for the House to vote on the bill in order for it to be taken up by the state Senate before the session is scheduled to conclude on Thursday. The legislation — the latest version hammered out on Friday — appeared poised to move, sailing through a joint legislative committee. It was expected to face a quick House vote in the afternoon.

But Ralston said that by midafternoon "fiscal so-called experts at Georgia State" were unable to substantiate some of the data showing whose taxes would rise and fall under the proposal.

"I was not going to ask members of the House to vote on this as long as there were significant questions about the quality of the data that we had been given to make some very big decisions," Ralston said.

The fiscal center at Georgia State was crunching the numbers for legislators.

Democrats — led by House Minority Leader Stacey Abrams, a tax attorney — had assailed an earlier version of the bill for actually raising income taxes on a large number of middle class Georgians. In a strange alliance, they were joined by tea party activists who also disliked the bill, pointing to what they said was a lack of transparency among Republican leaders trying to muscle it through.

"I think the more the merrier in trying to defeat bad legislation," Abrams said.

Abrams, of Atlanta, said the latest data Ralston referenced showed that 90 percent of Georgians would see their personal incomes taxes decline but that the decrease was tiny and was, in many cases, offset by new sales taxes on things like auto repairs and telecommunications services, like cell phones and cable.

The speed with which the legislation died left Capitol observers stunned as the session hurtled toward an end.

"We just kept going around and around, but the numbers kept changing, everything kept changing," said state Sen. Don Balfour.

The chairman of the Senate Rules Committee said that "in the end, I think the House just was not comfortable with the numbers."

"It's unfortunate. In the end, it's better to be safe than sorry. We'll come back. There were some good ideas"

The plan would have cut the state personal income tax rate from 6 percent to 4.6 percent in 2012 and 4.55 percent in 2013.

It would have applied a 7 percent across the board tax on telecommunications services, replacing an uneven hodgepodge of state and local taxes.

The proposal would also have eliminated the tax on energy used in manufacturing and mining and slap a new sales tax on the person-to-person sales of cars, boats and airplanes as well as auto repair and maintenance,

Republicans last year created an advisory panel to study the state's tax code and then rejected many of its recommendations, such as placing the state sales tax back on groceries and boosting the state sales tax on cigarettes.

For the tax plan to be taken up in a special session, Gov. Nathan Deal would have to put it on the calendar. A spokesman for Deal suggested he was open to the possibility, which would come after the end of the current fiscal year when the state has a better sense of whether revenues are rebounding.

"By that time, we'll know the final numbers on our 2011 revenue growth and we'll have more data on the fiscal impact of the tax package," Brian Robinson said.

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