Why Does Georgia Seem to Disdain Atlanta?

We subsidize education and other services consumed by the rest of the state.

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.

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Porter Versfelt III August 07, 2012 at 09:56 PM
Is this the one? http://press.princeton.edu/titles/8043.html
Jarod Apperson August 07, 2012 at 10:00 PM
That's the one. I'm not all of the way through it yet, but so far it has been interesting--some good history on local politics and some comments from people (still alive) who left the City Atlanta.
Péralte Paul August 08, 2012 at 01:00 PM
While the South's unjust cause, which led to "economic Armageddon" might be part of the reason, I think it's also because everything is here. Look at other states and you see they spread the wealth. Here in Georgia the capital of state government is Atlanta, the business capital is Atlanta, the entertainment capital is Atlanta and the education capital is Atlanta. In other states, all of those economic drivers are spread out.
Jonathan Tomko August 09, 2012 at 02:45 PM
As someone who has lived in Midtown Atlanta for a number of years and downstate in South Georgia the primary factors contributing to this disdain are education and opportunity. There are very few quality educational assets and resources in South Georgia, you have a serious problem with generational poverty and the burdens associated with it. Additionally, South Georgia is disadvantaged by its inability to lure external resources such as an educated workforce. Atlanta's cosmopolitan nature and reputation for luring a transient educated workforce give it quite the advantage. Many in South Georgia feel like Atlanta has everything that could solve its social ills, however many of these are advantages South Georgia will never have. So naturally they are going to argue for more despite not having a valid argument. I respectfully disagree with Paul, not all states spread the wealth in fact I can think of several states where a similar dynamic exists. Illinois would be the first example that comes to mind. 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.
Jarod Apperson August 09, 2012 at 02:58 PM
Hey Jonathan, I absolutely agree with you on the importance of education for the state's future. I'm not complaining that we subsidize education for poorer regions of the state. Instead, I think it's great for education to be equally funded, even in poor communities. It just seems like there is a view among some (especially in the Metro) that the City of Atlanta is a drag, mooching off of everyone else, when the exact opposite is true. 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


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