A Georgia rural tax credit program that has cost the state more than $50 million is facing new resistance from critical lawmakers who say it is little more than a special interest boondoggle that enriches out-of-state venture capital funds.
The Georgia Agribusiness and Rural Jobs Act (GARJA), first adopted in 2017, is designed to use tax dollars to spur business investment in struggling areas of the state. It is back before the General Assembly this session for another five-year renewal and critics say it is wasteful, inefficient and lacks proper oversight.
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Scholars and other critics who have studied these types of investment vehicles, known as capital company (CAPCO) investment programs, say they lack transparency, are a bad use of tax dollars and are very profitable for the investment firms that dole out the loans.
Julia Sass Rubin, an associate public policy professor at Rutgers University and an expert in tax credit investment models, said the investment funds generally get to keep the money the state invests into the program. She reviewed Georgia’s audit at the AJC’s request.
“What you basically have is a very expensive program that is bringing in people from out of state to make money from Georgia taxpayers without creating lasting value in Georgia,” Rubin said.
