Tax policy hurts Georgia, senator says

State Sen. Jason Carter -- grandson of former Georgia governor and former President Jimmy Carter -- was the guest speaker at a Marietta Rotary Club meeting last month.

In Republican-dominated Cobb County, the Decatur Democrat delivered a speech that veered from the traditional GOP message.

Carter told the attendees that continual shrinkage of the government -- which has been a conservative standard -- is hurting Georgia in the long run.

"We collect fewer state taxes per capita than any other state. We have won the small-government competition," he said. "... And although state taxes are low, Georgia is the eighth-most-dependent state on the federal government."

Is Georgia collecting fewer state taxes while receiving lots of federal government funds on the back end? PolitiFact Georgia decided to look into it.

Carter told us that The Marietta Daily Journal, where we first saw his Rotary Club comments, left out part of his statement. He told the crowd that his tax and dependency claims were based on information from the Tax Foundation, Carter told PolitiFact Georgia in a phone interview. He also cited an Atlanta Journal-Constitution article as a second source for his dependency claim.

"The discussion was about the difference in the levels of government. And while we’ve shrunk the federal government, we’ve increased the burden on the state and local governments," Carter said. "The key is the state government taxes."

We found the Tax Foundation statistics that Carter cited in the organization’s "Facts and Figures" report of state tax data, released in March. The report, by the nonpartisan tax research group based in Washington, includes state tax and federal dependency data for fiscal year 2011.

According to the charts, Georgia ranked last with $1,639 in state taxes collected per capita.(Georgia’s 2010 population was about 9.7 million.) The chart is based on the census’ definition of state tax collections, Tax Foundation officials told us. The next closest state was South Carolina at $1,650. Alaska collected the most state taxes per capita at $7,708.

A second Tax Foundation chart, also for fiscal 2011, showed that Georgia also ranked last in the amount of state revenue collected per capita, at $3,807. The revenue data include the taxes levied by the state as well as other general revenue used to operate, such as licenses, fees and transfers from the federal government.

We next went to the Census Bureau’s state government tax collections summary report, released in April, for fiscal 2012 data. Governing magazine, which covers politics, policy and management issues of state and local governments, aggregated the census data. We compiled Governing’s data into a spreadsheet and found that Georgia ranked second-to-last for the lowest total state taxes per capita, at $1,711.44. New Hampshire ranked last at $1,675.94 taxes collected per capita.

So Carter’s tax claim was correct in fiscal 2011 but off a bit for the following fiscal year.

On the second part of his claim, Carter again used Tax Foundation data, along with an AJC story published about a week before his Rotary Club speech.

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The Tax Foundation used figures from the Census Bureau to determine states’ dependence on the federal government. The organization divided each state’s intergovernmental revenue, or grants and other aid received from the federal government, into the state’s general revenue, which includes all tax revenue. Those calculations, also in the Facts and Figures 2013 report, showed that Georgia was the ninth-most-dependent state in the nation in fiscal 2011. Federal aid accounted for about 41 percent of general revenue. Mississippi was the most dependent, getting 49 percent of its revenue from the federal government; Alaska was the least dependent with 24 percent.

The AJC story reported that about 31.6 percent, about $12 billion, of Georgia’s state agency spending was made up of federal funds in fiscal 2012, according to the paper’s review of budget records. The paper found that Georgia has been using federal money to fill budget gaps created by shrinking tax collections and higher demand for state services such as Medicaid. Georgia legislators have discussed forming a committee to study the state’s federal government dependence.

To sum up, Carter said that the Peach State collects fewer state taxes per capita than any other state, yet is the eighth-most-dependent state on the federal government.

Based on Tax Foundation and census data for fiscal 2011, Carter is correct on his tax collection claim. Advance the data forward a year and Georgia moves up a step in its collections for fiscal 2012. On federal government dependence, analysis of census data shows that Georgia was the ninth-most-dependent state in fiscal 2011.

Carter’s overall point is that Georgia is fostering a smaller state government but at the same time relying heavily on federal funds. He seems correct on that point. But his calculations were slightly off.

We rated his claim Mostly True.