Jay Bookman

Opinion columnist and blogger with The Atlanta Journal-Constitution, specializing in foreign relations, environmental and technology-related issues

Struggling Ga. taxpayers subsidize jetsetters' lifestyle

Gulfstream, the Savannah-based manufacturer of high-end business jets, just announced the launch of two new lines of corporate luxury jets: The G500, with a selling price of $43 million, and the G600, with a selling price of $54 million.

Within Gulfstream's product line, however, the two new planes are the rough equivalent of the cars that you find available at Avis or Hertz. As they roll off the assembly line, many of them will be snatched up by firms that lease private jets or sell time-shares to corporations or wealthy individuals, the Wall Street Journal reports.

The real top-of-the-line model at Gulfstream is the highly coveted G650, with a sales price of $64.5 million and a waiting list of almost four years for delivery. It has a maximum range of more than 8,000 miles, reaching air speeds twice that of commercial airliners, and boasts luxury touches that make it a must-have status item among billionaires.

And when you've got billionaires lining up, willing to wait years to get their hands on your product, business is very good. Stock of Gulfstream's parent company, General Dynamics, is up 33.7 percent in the past year, even after the recent selloff on Wall Street, and second-quarter profits were $646 million, with Gulfstream generating a huge part of that number.

In many ways, that's a great success story. However, I think it's worth noting that the people of Georgia are making their own contribution to the General Dynamics bottom line, in addition to what they contribute in terms of their own labor and education. Earlier this year, the Georgia Legislature approved a bill that gives Gulfstream a permanent special-interest tax break worth an estimated $29 million to $40 million a year.

Under House Bill 933, signed into law by Gov. Nathan Deal in April**, Gulfstream gets a permanent sales tax exemption on all parts used to maintain and repair the high-end corporate jets that it sells. Your local auto mechanic pays a sales tax on items used to repair your car; which means that he in turn charges it to you. But Gulfstream and its deep-pocketed customers are exempt.

Meanwhile, median household incomes in Georgia continue to drop. More than 17 percent of Georgians live in poverty, as do 27 percent of our children -- that's more than one in four. In fiscal 2013, we had 42,000 more students in Georgia public schools than we did in 2009, being taught by 9,000 fewer teachers. We aren't allowing our working poor to get access to Medicaid coverage that is available in other states because we're told that Georgia can't afford it.

Yet even with all that, Georgia's struggling taxpayers are being forced to subsidize a extremely profitable manufacturer of high-end corporate jets and its billionaire customers to the tune of up to $40 million a year.

In what kind of world does this kind of income redistribution make sense? In what kind of world can that be said to be fair?

The kind of world in which we live, apparently.


** A year earlier, in 2013, Deal had signed a temporary extension of the Gulfstream sales-tax exemption on the same day that he vetoed a less expensive sales tax exemption for medical clinics, health centers, food banks and other charities.

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About the Author

Jay Bookman writes about government and politics, with an occasional foray into other aspects of life as time, space and opportunity allow.