The State of Georgia’s primary source of revenue is a production tax on individual income. In 2013, this tax is budgeted to account for 51% of state revenue. The State’s second largest source of income is a consumption tax (sales and use). In 2013, this tax is budgeted to account for 33% of state revenue.
When compared to the rest of the state, the City of Atlanta and intown DeKalb are disproportionately productive. Our per capita income ($36,272) exceeds the rest of the state ($24,489) by 48%. We account for 7.9% of Georgia’s income, though we only represent 5.5% of the population.
Since production taxes are directly tied to income and consumption also increases with earnings, the State of Georgia collects a disproportionately large portion of its revenue from Atlanta and intown DeKalb. In dollar terms, this means each year Atlanta and intown DeKalb pay about $340M more than a per capita share of production and consumption taxes (see attached calculation).
The State of Georgia spends this money in a variety of ways, but the biggest portion goes towards education. Forty-two percent goes to the Department of Education which funds local K-12 schools throughout the state1.
At the state level, the City of Atlanta and intown DeKalb are subsidizing education and other (smaller) services for the rest of the state.
Since federal income taxes are higher, progressive production taxes, it is safe to assume that our overall subsidizing of services consumed by the rest of the state greatly exceeds the $340M cited above.
All of this begs the question, why does the rest of Georgia seem to disdain such a benevolent benefactor?
- Jarod Apperson is a Midtown resident and CPA
Income and population figures were obtained from the 2010 census. Budget figures are for the Fiscal Year 2013 and were obtained from the Governor’s Budget Report.
1In calculating the percentage of spending, the Department of Transportation is excluded as its state funding is primarily derived from Gas Tax. The Debt Sinking Fund was also excluded as it is not a service.
I think part of the sentiment stems from the economic Armageddon that came after the destruction of Atlanta and points north and to the ocean wrought by Genera Sherman and his troops in the War Between The States. It lasted more than 100 years. Northern carpetbaggers and oppressive post-war taxes, military occupation and economic sanctions added to the grief in Georgia and throughout the South. This is a part of the war few American students are taught about. What is the name of that book Jarod I'd like to read it.
http://press.princeton.edu/titles/8043.html
The State of Georgia needs to do more to invest in advancing Georgians educationally because an educated workforce is key to luring businesses and jobs especially in a more globalized economy. While tax breaks and deeper ports may provide short term gains they are easily replicated by other states, and companies are always looking for the next best thing to increase their bottom line. Sadly states that have religiously invested in education are already light years ahead of us.
I've also done some research on education in Georgia, and you might enjoy this article about how Georgia education outcomes = inputs in most cases. Charles R. Drew is an exception. http://gradingatlanta.tumblr.com/post/24808318510/the-land-of-opportunity