Rep. Chuck Efstration, right, the governor's floor leader, presents HB 918, the governor's income tax proposal, before the Ways & Means Income Tax Subcommittee in Atlanta on Tuesday, Feb. 20, 2018. The governor and lawmakers have announced a proposal to slash income taxes in Georgia in response to federal tax changes passed in December. (Bob Andres/Atlanta Journal-Constitution via AP)

ATLANTA — Gov. Nathan Deal and high-ranking lawmakers announced plans Tuesday to cut the state’s income tax rate next year – and possibly again in 2020.

The announcement comes amid mounting pressure in an election year to cut taxes so Georgians do not end up paying more to the state after last year’s federal tax code overhaul.

Georgia could potentially rake in an extra $4.7 billion from taxpayers over the next five years if lawmakers do nothing. Deal had cautioned those eager to slash taxes now that the exact budget impact still remains uncertain.

Under the plan announced Tuesday, the income tax rate for individuals and corporations – which currently tops out at 6 percent – would fall to 5.75 next year.

The rate would drop again the following year to 5.5 percent – so long as lawmakers and the new occupant of the governor’s mansion sign off on the additional cut later.  

“We believe that this approach will make it clear that our intent is to further reduce the tax burden on the citizens of our state while simultaneously safeguarding the mechanisms that keep our economy growing in the right direction,” Deal said at a press conference held Tuesday at the state Capitol.

The proposal, which passed out of committee just hours after the announcement, would also double the standard deduction for Georgia taxpayers.

Deal said those two changes will “eat up the bulk of this so-called extra income.” That anticipated influx of extra cash is due to federal changes that curtailed some of the deductions Georgians are accustomed to using.

“Even though the initial position – which is ‘wait and see, and we’ll fix it when we know how much it is’ – probably makes good fiscal sense, it doesn’t satisfy people who say, ‘If you know it’s going to be there, at least address the part you know is going to be there,’” said Rep. Jay Powell, R-Camilla, who chairs the House Ways and Means Committee. “And this does that.”

Moving any faster, Powell said, would push the state into deficit spending. Powell said the cuts are timed to match the rising revenue projections.

Powell had a measure carried over from last year that would flatten the state’s tax brackets and cut the rate. He said Tuesday that he is not pushing for that overhaul right now.

“In the era where we are with as many moving parts, this is probably as much as we can do now until the dust settles and we see where we are,” Powell said of the governor’s tax plan.

Lt. Gov. Casey Cagle called the proposal an “historic tax cut.” The individual tax rate has not been reduced since 1937. The standard deduction has been the same since 1981. The corporate tax rate has gone untouched since 1969.

“We are capitalizing on President Trump’s tax reform to double the standard deduction and move our top income tax rate to an all-time low of 5.5 percent,” Cagle said.

Some, though, said they were wary of a plan that they said could bring unintended consequences.

“A cautious, measured approach to fully understand and realize the largely unknown impact of the recent federal tax changes had the support of state leaders until just last week,” Taifa Butler, executive director of the left-leaning Georgia Budget and Policy Institute, said in a statement. “That remains the more prudent approach.”

Others, though, have argued for deeper cuts. Rep. Kasey Carpenter, R-Dalton, said he would have liked to see deeper cuts sooner, but he said the plan unveiled Tuesday is the wisest approach.

“Anytime you can go home and tell people you cut the tax rate, that’s going to be a win,” Carpenter said.