March 7, 2018

Georgia Lawmakers Did the Right Thing for the Wrong Reason on Delta and the NRA

Georgia Report

Casey Cagle isn't going to take your guns, but he will take your tax break.

The recent unpleasantness surrounding Delta Air Lines, the NRA and a foregone tax break are a telling example of how the right thing often gets done for all the wrong reasons.

When last we looked, the state House of Representatives had just passed tax break legislation that included a special favor for Delta: a sales tax exemption on jet fuel that would mean about $40 million a year.

In most years, it would have been a slam dunk for the Senate to approve the bill and send it along to Gov. Nathan Deal for his signature. After all, Delta had hired David Werner, a longtime aide to Deal, as its government affairs head. Werner’s assignment was to lobby his old boss to secure that tax break, and it looked like the skids were greased for passage.

Not this time. Delta disclosed that in the wake of a horrific school shooting in Florida, it was ending a discount program for NRA members. The company said it was doing it to stay “neutral” in the ongoing debate over gun control laws.

Every Republican at the capitol, along with every GOP candidate for governor, jumped to condemn Delta and demand that the tax break be taken back. Lt. Gov. Casey Cagle seemed to outdo everyone else when he tweeted:

With Cagle leading the charge, it quickly became evident that the Delta tax break had been grounded. Deal, who had pushed the hardest for the special treatment of Delta, finally threw in the towel and said he’d sign the rest of the tax bill if the jet fuel exemption were removed. But he clearly was not happy about it. “We were not elected to give the late-night talk show hosts fodder for their monologues or to act with the type of immaturity that has caused so many in our society to have a cynical view of politics,” Deal said at a press conference.

Of course, telling a Georgia politician not to act immaturely is like telling a skunk not to stink. Secretary of State Brian Kemp, another GOP candidate for governor, tried to one-up Cagle by proposing a sales tax holiday on the purchase of firearms, ammunition and accessories, tied in to the Fourth of July holiday. “Now, it’s time for the Georgia Senate to kill the tax break for Delta and replace it with a sales tax holiday that benefits the same Second Amendment supporters that Delta—and other corporate cowards—are publicly shaming,” Kemp said.

Delta, to its credit, did not back down. “Our decision was not made for economic gain and our values are not for sale,” CEO Ed Bastian said in a memo to employees.

By Thursday of last week, both houses had voted to adopt the tax bill without the Delta tax break. By Friday, Deal had signed it into law.

While Republican officials were the target of many jokes on late night talk shows, they actually did the right thing here. Delta did not need this kind of corporate welfare.  It is not some struggling startup business—it is a multinational corporation that reported pre-tax profits of $5.5 billion in 2017. If legislators had given Delta that tax break, it would have deprived the struggling Clayton County school system of millions of badly needed tax dollars each year (much of the Atlanta airport is located within Clayton).

Delta did not deserve to be punished for taking a position on a controversial public issue—that was wrong. But it would have been just as wrong for the governor and lawmakers to give the airline an undeserved tax gift.