The General Assembly took heed this week to provide Georgia residents with solutions that will stimulate the state’s economy. Two important sectors of the economy are targeted under measures on their way to final passage: Housing and jobs.
As I have said before, fixing housing is the first step to fixing the economy. In the past year, Metro Atlanta has seen a 20 percent decline in home values and 13 percent statewide. If we do nothing, housing values will eventually be set back 10 years at this rate. Recognizing that immediate action is crucial, the legislature voted in favor this week of revitalizing Georgia’s housing market by offering a $3,600 home buying income tax credit.
This incentivizing credit will be available for only six months, encouraging homebuyers to act now. This represents the very definition of a true stimulus: a quick thrust that incites activity within the market, producing tangible results.
Under House Bill 261, the credit will apply to new and previously occupied homes and condominiums, including foreclosures.
This legislation is a product of the joint Economic Development hearings held late last year on Georgia’s housing market. I was proud to work with Rep. Ron Stephens on the issue and to carry his bill to passage in the Senate. In December, industry experts warned that in Georgia, particularly in our area of Northeast Georgia, the housing market was in a depression. At that point, housing starts had plunged 67 percent.
Though the situation has continued to worsen, we had some good news recently with the unexpected 22.2 percent rise in housing starts for the month of February. While we still face an uphill battle of stabilizing housing, this tax credit will go a long way in incentivizing the market and start providing immediate relief.
The significant job loss throughout our state and across the nation is a direct result of the housing decline. Housing affects a great number of ancillary industries. When people stop buying homes, the local carpenter, painter, hardware store owner and moving man are all put in danger of losing their jobs.
Georgia’s jobless rate jumped to a staggering 9.3 percent in February, putting our state above the national average. Our income growth is among the slowest in the U.S. A contributing factor has been the loss of a large base of jobs in the construction industry. Small businesses, which represent over 90 percent of employers in Georgia, are also struggling to survive. In response to this dismal situation, the legislature is offering a bright spot of hope. Capitalizing on the hard work and entrepreneurial spirit of the people of Georgia, not big government, we have passed the most pro-business piece of legislation the General Assembly has ever considered — the Jobs, Opportunity and Business Success Act of 2009 (JOBS Act).
This tax relief package aims to lower taxes and reduce regulation, as opposed to forcing debt on Georgia citizens with new spending. House Bill 481 and 482 comprise the JOBS Act with HB 481 providing a one-year filing fee holiday for new businesses, a $500 credit toward the unemployment insurance tax for each newly hired employee that was receiving unemployment benefits, a $2,400 income tax credit for each eligible employee hired, the refund of $186 million in state held sales tax deposits and the gradual elimination of the business income tax for Georgia-based corporations. HB 482 is a referendum to eliminate the state inventory tax on all Georgia businesses.
In other news this week, a bill I authored that clarifies the use of stream buffers received final passage in the House and is now awaiting signature by the governor.
Current law requires that a 25-foot buffer be used along the banks of all state waters. Senate Bill 155 exempts ephemeral streams from this requirement, which are areas that temporarily collect water during rainfall, such as a runoff or ditch.
Simply put, this bill helps with compliance on where buffers are needed and where they are not. This is a common sense measure that codifies EPD rules and provides consistency with federal laws.
Looking ahead, the legislature faces its final week of the 2009 session.
There is still much work to be done, and I am confident that this will prove to be a productive and effective session for Georgians everywhere.
Sen. Chip Pearson serves as chairman of the Economic Development Committee. He represents the 51st Senate District, which includes Dawson, Fannin, Gilmer, Lumpkin, Pickens and Union counties and portions of Forsyth and White counties. He may be reached at (404) 656-9921 or via e-mail at chip.pearson@senate.ga.gov.