Months after it fell victim to an election year political struggle, Georgia's jet fuel customers - like Delta - are getting their tax break in a matter of days.
Deal announced around 2 p.m. on Monday that he would be suspending the state's 4 percent sales and use tax on jet fuel beginning Aug. 1 - a tax that netted the state $39 million in revenue for the 2018 financial year alone.
“Georgia imposes the fourth-highest fuel tax burden among states with major airport hubs, putting us at a daily disadvantage behind North Carolina, Texas, Florida and New York, among others. In fact, Georgia’s tax burden ranks only behind high-tax states California, Illinois and Michigan,” said Deal.
He added that the economic impact of Georgia's airports amounts to $62 billion per year with Hartsfield-Jackson accounting for nearly $11 billion in foreign investment and 42,000 jobs in the state.
“In order to remain the No. 1 state in which to do business, attract more companies to our communities and provide more jobs for our growing population, it is crucial to maintain and preserve a pro-business climate," Deal said.
The move comes just days after Lt. Gov. Casey Cagle lost his bid to become the Republican nominee for governor.
Earlier in the year, Cagle killed a tax break for the fuel break as a referendum on Delta Air Lines over its treatment of National Rifle Association members. Delta had announced it would be withdrawing airfare discounts for the company drawing the backlash from Cagle and others.
The item was later removed from a major tax cut package which was signed into law by Deal despite its absence.
While Cagle became the lead voice behind removing the tax break from the bill, he wasn't alone. Secretary of State Brian Kemp, who won the Republican nomination, also spoke out against Delta's decision and the jet fuel tax break.
At the state level, the opposition to the bill may have been based on Delta's NRA snub, but it also had opponents closer to home due to its impact on education.
The removal of the tax break was a relief for Clayton County schools who stood to lose $20 million from its own budget over the next two years - a 17 percent loss to the Special Purpose Local Option Sales Tax (SPLOST) budget.
“Which corporation, Delta included, can maintain its level of operations with a reduction of 17 percent in its revenue?" Clayton County Schools Superintendent Morcease Beasley said back in February. "That is not moral. We wouldn't allow Delta to experience it, so why would we allow our children to experience such?"
Beasley said several capital projects around the district would be changed or eliminated, though Clayton County's proximity to the world's busiest airport could mean it loses the most.
But Gov. Deal has long said the tax break on jet fuel is a necessary cut for the state to stay on top.
"Providing tax relief to job creators will help us maintain our competitive advantage as a global hub for commerce now and in the future,” he said.
He added that this isn't an entirely new practice for the state either - and that past similar tax breaks have met major success.
"In 2012, for example, we eliminated the energy sales tax on manufacturers," he said. "As a result, in the past five years, we’ve seen manufacturing jobs grow by 12.5 percent to a total of 395,807 in 2017."
Delta CEO Ed Bastian has since responded to the governor's decision directly in a statement released roughly a half hour after Deal's anouncement.
"With 33,000 employees in Georgia, we are honored to call this our home state, and proud of the $58 billion in economic impact that Hartsfield-Jackson Atlanta International Airport creates statewide every year," Bastain said. "The savings will allow us to invest additional flights into Georgia in the years to come. We look forward to continued growth of our service in Georgia and the job creation that will accompany it."
