by John Fredericks / Staff and Maggie Lee / Staff

When is a tax increase not a tax increase?  Why, when it's called a "fee" of course.  But what do you call tax cuts aimed at wealthy seniors and property owners which have no pretension of creating jobs?

"The Georgia Taxpayer Relief Act of 2010," according to a press release signed by serving Senate Majority Leader Chip Rogers (R-Woodstock).

That's the name he retroactively applied to House Bill 1055, passed by both chambers last week.  It's a few bills hastily rolled into one that raises dozens of state fees, implements a new tax on hospitals, exempts seniors from a state income tax and cuts all property tax by a quarter-mil. 

By constitution, the state legislature must present a balanced budget to the governor prior to the session's conclusion on Apr. 29.

CUT

First the cuts.  The bill raises senior citizens' state retirement income tax exemption from $35,000 to infinity.   So "retirement income"  -- be it in rents, dividends or capital gains – will be exempt from state income taxes. 

So, no change for for the aged Wal-Mart greeter who earns less than $35k, but her well-heeled cohort will start to pay less and less on her retirement income until that tax is fully phased out in 2016. 

The other cut is the eventual disappearance of the quarter-mil the state collects in ad valorem taxes, mainly levies on property and cars.  It applies both to individuals and companies. 

Once both taxes are fully trimmed away, the amount of money not collected annually will reach $250 million, according to Wednesday night's official estimate. 

"This is a great first step to ward moving toward a day when we no longer tax production in this state, income in this state," said Rogers on the Senate floor, admitting that the senior tax cut is modest. 

"If we could leave here today and say that in a few years the state will not be involved in taxing property," he continued, "that would be good."

The senior tax cut should attract the wealthy aged to Georgia instead of Florida, suggested Sen. Chip Pearson (R-Dawsonville).  Then the argument goes that their consumption would stimulate the economy and create jobs.

 
AND RAISE

Next the rises in the same bill:  dozens of state fees will be increased -- think fishing licenses, bird dealers' licenses, some civil court fees, airport inspection fees, the inspection stickers on gas pumps and everything in between.  Some haven't been raised in decades.  Those, according to the estimate, will be worth $90 million annually.

Rogers argued that if fees are set too low, taxpayers essentially subsidize some activities.   If it costs more to regulate a bird dealer than that dealer pays in fees, for example, everyone's subsidizing the bird trade.   

But the most contentious is the new 1.45 percent tax -- called by supporters a "fee" -- on hospitals.

Supporters point out that by raising money in the state, they can draw down three times their sum in federal matching funds for a total of about $869 million.  That will be channeled to the state indigent care fund.

 
Minority Leader Sen. Robert Brown (D-Macon) chided his anti-federal colleagues: "It's going to draw down that bad money from Washington that we love to spend."

The Senate ended by passing the mega-bill, hospital tax and all. But it seems there's a stubborn GOP rift, as the final vote mirrors one last week in which two Republicans suffered harsh consequences for stepping out of line  and nay-saying hospital tax came through as a stand-alone bill.

The underlying problem for Republicans is that the big fees list and the hospital hike look and smell like a tax increase, and GOP leaders like Smith and Sen. Mitch Seabaugh (R-Sharpsburg) are feeling the heat.  The July primaries will tell how deep or permanent the Republican split is, and if a strict no-tax stance -- minus spin -- is the way to primary victory.