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Nancy Badertscher
By Nancy Badertscher March 18, 2014

Deal seeks credit for "lowest taxes" in U.S.

Gov. Nathan Deal has two Republicans, one Democrat and one Libertarian running against him. His initial re-election strategy: tell voters that he’s the "real Deal" in the race and the candidate who has produced "real results."

In a recent campaign flier, Deal cites one of those "real results." Georgia, the flier points out, is ranked as the state with the "lowest taxes per capita"  by the nonpartisan, Washington-based Tax Foundation

The campaign accurately quotes the Tax Foundation’s latest published report. It has Georgia at 50th out of 50, with state tax collections averaging $1,639 per person, well below the national average of $2,441 and far below No. 1, Alaska at $7,708 per person.

But is that something that Deal can take credit for? PolitiFact Georgia decided to look further.

The foundation’s report was published in 2013. But it was based on state tax collections for the fiscal year that runs from July 1, 2010, to June 30, 2011.

Deal only became governor Jan. 10, 2011. He was in office less than six months during the period that was the basis for the foundation’s rankings.

We asked Jen Talaber, the communications director at Deal for Governor, to provide evidence that Deal, in fewer than six months, had influenced the state’s ranking and could claim that as  one of the "real results" of his term.

She made three points. First, one of his early executive orders put a freeze on the gas tax. Second, he could have adjusted the tax rate or allowed agencies to implement something like a tobacco tax, but did not. Lastly, the governor controlled his revenue estimate in the amended budget for Fiscal Year 2011 to limit state spending and rebuild the state’s reserves, or savings.

"We don’t’ take credit for anything we haven’t done," Talaber said in an email. "This is about now and the future. We think it’s a good thing that we have the lowest tax burden, and we’ll fight to keep it that way."

Our research confirmed that Deal signed an executive order freezing the state gas tax.That stopped a scheduled 1.6 cent-per-gallon tax increase that was forecast to collectively cost motorists $40 million. But the freeze took effect July 1, 2011, and had no impact on state tax collections in the fiscal year ending one day earlier, on June 30, 2011.

To the second point, that’s a tougher one. It’s hard to say how something the governor didn’t do affected state tax collections. Some type of tax increases are regularly floated during the annual sessions of the General Assembly. But such proposals can go nowhere and likely wouldn’t have in a year when the state and Georgians were still struggling to dig out from the crippling economic downturn. Even if a tax increase or tax cut had been pushed by Deal, it’s very unlikely that it would have affected Fiscal Year 2011 tax collections, longtime Capitol observers say.

To address the third point, we turned to Teresa MacCartney, director of the Governor’s Office of Planning and Budget. She said the governor lowered the general fund revenue estimate for the amended 2011 budget by $27.7 million.  

"The reduction in estimated general fund revenues supported the governor’s position of not introducing nor supporting any proposed tax increases during the 2011 legislative session," MacCartney said.

The governor’s conservative revenue estimates allowed the state to build up its revenue shortfall reserve by $212 million, a 183 percent increase over the previous year’s balance, she said.

But rebuilding reserves wouldn’t have changed the per-person state tax collections in Fiscal 2011.

Norton Francis, a senior research associate with the nonpartisan Urban-Brookings Tax Policy Center, and Alan Essig, executive director of the left-leaning Georgia Budget and Policy Institute, said Georgia’s ranking as 50th in state tax collections is the result of the tough economy more than anything.

"It had nothing to do with anything the governor did or the General Assembly did," Essig said. "It had to do with the nature of the economy and the nature of the impact of the recession, which hit Georgia harder than other states, comparatively, because of housing, our economy and all of that."

Francis, who specializes in state and local finance issues, including tax policy and revenue estimating, said it’s simple logic.

"If your population continues to grow and your income goes down, your taxes per capita are going down," he said.

Both point to the Tax Foundation’s rankings as evidence that Georgia has traditionally been a low tax state.

Georgia was 42nd in the Tax Foundation’s rankings for per-capita state tax collections in Fiscal 2007. As the recession hit, it sank to 45th in Fiscal 2008, 48th in Fiscal 2009 and to 49th in Fiscal 2010.The state’s ranking fell to 50th in FY 2011, the first year of Deal’s term, even though tax collections actually increased to $1,639 per person from $1,529 in FY 2010, according to the Tax Foundation’s website.

"If the governor is bragging (about Georgia being ranked 50th), then he has to take responsibility for the outcome -- and that’s the shortfall in funding for education, one of the highest numbers of uninsured and the critical condition of child welfare services," Essig said. "You can’t have it both ways."

Deal’s only Democratic opponent, Sen. Jason Carter of Atlanta, brought up the same data last year. He was saying that Georgia is fostering a smaller state government but at the same time relying heavily on federal funds. PolitiFact ruled his calculations were slightly off but his claim was mostly true.

There’s one more piece of data. We contacted officials at the Tax Foundation to confirm that the FY 2011 rankings on their website were the latest available. They said their report for 2014, which is based on new data from FY 2012, the first full year of Deal’s administration, is due out in a week or two. It shows Georgia rising one spot to 49th in per capita tax collections. Additionally, it shows state tax collections up $41 per person, to $1,680.

So where are we in truth-testing the campaign claim that Deal deserves credit for Georgia having "the lowest taxes per capita of any state?"

We don’t know how to answer the argument that he could have adjusted the tax rate or allowed agencies to implement something like a tobacco tax. As the campaign points out, he did neither.

But we find no other evidence that in Deal’s first six months in office, he had any impact on the state’s ranking on sales tax collections per capita.

The campaign’s overarching point seems to be that Georgia has low per capita taxes under Deal. That is true. But it also had low taxes under his predecessor. Under the latest ranking, Georgia is still near the bottom, but it will move up a notch to 49th-lowest.

Deal’s campaign has a point. But a lot of context is needed to fully understand the claim.

We rate the statement Mostly False.



Our Sources

Campaign flier for Deal for Governor and its website, showing "the results," including the Tax Foundation’s ranking of Georgia as having the lowest state tax collections per capita of any state.

State tax collection rankings, Tax Foundation,

Interviews and emails with Jen Talaber, communications director, Deal for Governor

Interview with Alan Essig, executive director, Georgia Budget and Policy Institute

Emails with Teresa MacCartney, chief financial officer and director, Georgia Office of Planning and Budget

Phone calls and emails with Norton Francis, a senior research associate, Urban-Brookings Tax Policy Center

Emails with Elizabeth Malm, economist, Center for State Fiscal Policy, Tax Foundation, Washington, D.C.


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