Last Updated on Wednesday, 18 January 2012 11:57 Written by Lou Phelps Tuesday, 17 January 2012 16:17
By Chuck Eaton
Jan 16, 2012 - Georgians have made it clear that attracting and retaining jobs should be the No. 1 priority of every elected official. Removing this tax as an impediment to job growth and creation is a great first step.
Late last fall, my colleagues on the Georgia Public Service Commission and I sent a letter asking the Georgia General Assembly to consider removing the sales tax manufacturers pay on energy, including electricity, used in the manufacturing process. Governor Nathan Deal supports this idea, as do Lt. Gov. Casey Cagle and Speaker David Ralston.
Manufacturing is of major significance to the economy of Georgia, employing hundreds of thousands of skilled workers. Georgia, like virtually every other state, does not tax raw materials used in manufacturing. Instead, one sales tax is applied to the finished product to avoid a pyramiding scenario where sales tax is paid on top of embedded sales tax. Georgia is one of only ten states, and the only state in the Southeast, to charge full sales tax on energy.
This places Georgia at a competitive disadvantage when it comes to attracting new jobs and investment. The hidden cost of Georgia’s tax on energy also puts existing manufacturing jobs at risk by increasing production costs.
Before I was elected to the Public Service Commission, I worked in LaGrange as a manufacturing representative. I traveled the Southeast, calling on companies while selling our products. You could say I was on the frontline of the free market. In preparing proposals, I noticed that even within our own company, different plants could produce the same product for different costs. This not only impacted whether our company got certain contracts, but dictated where the actual manufacturing took place when we won an order. Higher-cost plants would inevitably lose out to lower-cost producers.
Georgia-based manufacturing plants face external and internal competition. Many corporations look at various facility costs daily, shifting business to a different state’s facility just as quickly. Less business means reduced payroll hours and smaller paychecks for the remaining employees. While plant closings garner much media attention, the lead-up to the closing can be more painful and less publicized, as business is shifted away and jobs are slowly cut.
A large industrial plant’s electrical cost can rival payroll as its biggest expense, so the competitive effect of the sales tax is significant. While Georgia’s electric rates are competitive with other states, the added sales tax can change that dynamic.
The Albany City Commission and the Dougherty County Commission have stated that repeal of this tax is their highest priority because of its impact on local jobs. Proctor & Gamble’s paper plant is one of Albany’s largest employers and is Georgia’s second largest consumer of electricity. With energy being one of the largest expenses at the Albany plant, and with their constant pressure to lower expenses, failing to eliminate the energy sales tax could easily cost Georgia more in lost jobs and investment than it produces in state income.
In Dalton, the sluggish economy and the moribund housing market have combined to pummel the carpet industry, one of Georgia’s traditional manufacturing powerhouses. Several plants have been closed, costing the area several thousand jobs.
As I travel the state and speak with manufacturers about how to help them grow their businesses and create and retain jobs, managers constantly mention our energy sales tax as a cost that makes them less competitive. The cost of energy, especially in manufacturing processes that require massive amounts, is a major factor as to whether Georgia retains our manufacturing plants.
We cannot continue to put good manufacturing jobs at risk over an outdated tax policy. Repealing the sales tax on energy used by manufacturers should be at the top of any list of economic growth and job creation measures considered by the General Assembly.
Editor’s Note: Chuck Eaton,Georgia Public Service Commissioner for District 3.
Last Updated on Friday, 02 December 2011 08:52 Written by Lou Phelps Tuesday, 29 November 2011 16:09
ENDORSEMENT: Jeff Felser is the Best Candidate for Savannah Mayor for the Business Community
The Savannah Business Journal and Coastal Empire News endorses Jeffrey A. Felser for Mayor of Savannah in next Tuesday’s mayoral run-off election.
The challenging economy in Georgia and Savannah demands that our City government be open to change; that we have youthful leadership that is willing to adapt and innovate; and that the City leadership is open and engaging of new ideas.
Jeff Felser has a proven track record of questioning old processes and practices in Savannah and Chatham County, and a record of having an objective set of eyes on our behalf.
His opponent Edna Jackson is unquestionably one of the nicest people you will ever meet, an even-tempered professional who represents our City well at public functions, both locally and around the country. We owe her a debt of gratitude for her 12 years of service on the City Council, especially during the period of Mayor Johnston’s illness several years ago, and we hope she will continue to pursue opportunities to serve.
But, the challenges ahead require enlightened business practices, demand the willingness to have an open government, and call for someone who will challenge the status quo - be willing to say ‘WHY are we doing this?’
For the past eight years, time and again, the only two Alderman who have repeatedly raised their hands and asked the difficult questions of former City Manager Michael Brown, and of Mayor Otis Johnson and Mayor Pro Tem Edna Jackson, were Alderman Tony Thomas and Jeff Felser.
For years, these two elected officials have been willing to talk to the media, bringing us information on issues that they questioned, and about which they could not get answers.
Thomas’ strength in this regard was acknowledged and rewarded when no one ran against him in the Nov. 6 General Election, and he was the highest vote getter that day. He appears to be the leading candidate on the Council for Mayor Pro Tem. It’s time now to put Jeff Felser in leadership, as well.
For years, the Savannah City Council has violated the Open Meeting Law, has kept a City Attorney in place who was ineffective, and has failed to make the tough decisions to trim costs and facilitate business growth.
City Attorney Jimmy Blackburn’s son has been the Treasurer of Ms. Jackson’s election committees for years, including in her current bid for Mayor. It is that type of ‘insider’ situation that causes concern, and discomfort.
And while Savannah has what is termed a ‘strong City Manager form of government,’ the Mayor is the person that leads the City Council, is in charge of 'the message' to the staff from the public, makes sure that the voice of all Council members is heard...and tells the public the truth.
We cannot skirt over our problems of crime, poverty and a 60% dropout rate in our public schools. We have to be bold and creative. And as voters, we have to ask ourselves, ‘who will most likely bring about that change?’
Ms. Jackson would certainly work amicably with all parties to smooth the water, and attempt to ‘work things out.’ But we believe Jeff Felser is the candidate most willing to bring today’s problems and potential solutions to the public’s attention, and to the attention of the City Council on a day-to-day basis.
This week's City Council budget workshop was another case in point, once again, where Jeff Felser asked the most salient business question in the room. City Manager Rochelle Small-Toney and staff made presentations on key expense and revenue components in her proposed 2012 operating budget, including personnel. The City currently has 2, 551 FTE positions, a combination of full and part time employees.
They reviewed the City’s current strong financial position, it’s fully funded pension plan, and its strong bond rating. Small-Toney recommended that the Council put the $4.7 million in extra revenue that she projects they City will have left over at the end of 2011 into savings – versus spending it or using it to cut property taxes.
We also learned that the City has 241 open positions, about 9% of the total approved and budgeted workforce. A portion of those – about 76 jobs – are in the police and fire departments. But the rest of the positions are dark, and the open position levels have actually been much higher during the year, at times.
The 2012 budget fully funds all positions except for about 2.7% of total payroll for empty positions next year.
Felser asked the important business question. “If the City is running so well, even with our 241 unfilled, open positions – almost 10 percent of the workforce – why aren’t we being asked to cut the number of City employees, and cut the budget, and the tax burden of local residents?” Everyone just turned and looked at him, in silence.
There isn’t a company in this county that hasn’t cut its workforce - either because their revenues have declined - or because of the improved efficiencies of their operation through computerization and technology. Why hasn’t the City cut its workforce in a meaningful way, as well?
And, who will ask that question, and others like it, such as why our Police Department employees are working in antiquated, unhealthy buildings? Chief Lovett told us today that he is not aware of any meaningful amount in next year's Capital budget for his department. Felser has repeatedly questioned the City Manager on this issue.
He recently received the endorsement of the Georgia Board of Realtors PAC on behalf of Realtors in our area, people who want to see home prices stabilize and construction take off again.
Will things always be pleasant under Mayor Felser? No.
But will old practices and methodologies be challenged, will there be more open government, and will some people be replaced who need to pursue other careers or retire? Yes.
Jeff Felser is the right choice for Savannah, and for our business community.
Louise D. Phelps, Publisher
Coastal Empire News










