David Pennington makes his case

Last July, Dalton Mayor David Pennington became the first candidate to officially launch a campaign against Gov. Nathan Deal. The 61-year-old North Georgia insurance company founder has big dreams of downsizing state government, enacting ethics reforms, and growing the economy with entrepreneur-friendly policies. And yes, his plans include putting the kibosh on state income taxes once and for all.

This spring, Pennington will challenge Deal and Georgia Schools Superintendent John Barge in the GOP primary. The Carpet Capital’s mayor, who next month will formally resign to focus on his campaign, faces tough odds against an entrenched incumbent governor with millions in his campaign coffers. He recently explained to CL why voters should consider casting a ballot in his favor.

Why should Atlanta residents of all political beliefs vote for you instead of your opponents?

First of all, the governor is the governor of the whole state, not just Atlanta. The metro Atlanta area is about half of the state, population-wise. Georgia’s a very diverse state and Atlanta has been expected to carry too much of the weight for too long. What’s happening is that in the Atlanta area, the taxes paid are distributed across Georgia. Atlanta doesn’t get anywhere close to the percentage of taxes they pay.

For those of us not from Atlanta — I’m obviously from Dalton — we understand that Atlanta is 80 percent of the state’s GDP in Georgia. Where Atlanta goes, we’re going to go. Atlanta was really driving Georgia forward from the late ’70s to the mid-’90s. We raced up the charts in median income and per capita income. Once metro Atlanta lost its way, it’s taken Georgia with us at the same time. The solution has to be more balanced across Georgia for everybody pulling his or her own weight in order for this state to start moving again. We have dropped dramatically over the last 15 years not just compared to the nation, but the surrounding states. If we don’t turn things around soon, the poverty is going to overwhelm everything else we’re going to try and do.

If you become Georgia’s governor, how would you improve the state in that manner?

We’ve got to understand where Georgia’s real opportunities are over the next two decades. Unfortunately, most Georgians are only well-educated enough to get a good job in something like manufacturing that pays $13, $14, $15 per hour, plus health care benefits. That’s outside the Atlanta area because you don’t normally have heavy-to-medium manufacturing inside a metro area like that. That said, some of the outlying counties in metro Atlanta need the same thing, too.

Right now, we have to admit that Georgia is not competitive from a tax standpoint. We have the ninth-highest income tax in America. We have high sales tax. And we have the highest taxes on automobiles in America. Entrepreneurs in particular — and I’m a small businessperson, and so are my clients — we’re paying our corporate taxes on our personal tax returns. State income taxes are so onerous for small business generation and growth. If we don’t cut the income tax, we’re not going to get this economy going again.

If you look at technology entrepreneurs — which Atlanta has a good share of those, obviously with Georgia Tech down there — most are looking at going public someday. They want to start their businesses with a very efficient capital structure. That’s why they end up in Austin or Nashville if they’re not going to Silicon Valley. There’s no state income tax there! They don’t pay state income tax on their earning profits, they don’t pay state income tax on their capital investments, and they don’t pay state income tax on their dividends or capital gains.

Deal has touted that Georgia is now the No. 1 place in the U.S. to do business. How do you respond to that his take on the economy?

It’s just not true. It’s just not true. He points to one magazine. That one magazine, everybody needs to understand, it’s about crony capitalism. If you have cheap labor, get free land, and abate all out taxes, we’re going to try and locate there. The South has perfected that kind of economic development over the past 60 years. And the South today is just as poor on a relative basis as we were when we started that. The reason is that money we’re giving to out-of-state or out-of-country capitalists doesn’t come from God. It comes from taxpayers. You do not create wealth in-state by bribing foreign capitalists to locate a plant here. You create wealth by entrepreneurs starting and creating their own business here. If you look at most of the business that drive the state of Georgia, they were founded here.

Another way to increase those kinds of jobs is through improving Georgia’s public education system. You’re running against Deal, who just proposed a $547 million K-12 education funding increase, and major education advocates in Barge and Carter. How would you improve education compared to them?

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I’ll put my education credentials against anybody else’s in the race. As a businessperson, I’ve been active in the local education system for a long time. I donate my mayor’s salary to Dalton State College, which has produced about three-dozen scholarships over the last six years. My wife was a schoolteacher. My daughter-in-law is a schoolteacher. But here’s my stance on public education: I truly believe you can trace the decline of public education in this county to the centralization of power and control in the state’s governor’s office and legislatures, and now in Washington, D.C.

The more we centralize, the worst it gets. ... We need decentralized authority by the local school boards, schoolteachers, and local communities. That’s the only way we’ll close our achievement gap.

Smaller government, across the board, is the way to go in your mind.

Look at what the state and federal government has done whenever they say they’re going to give money to local school systems. It comes with untold mandates. Those mandates mean you have to hire central office staff to keep up with testing requirements proven to do no good whatsoever toward improving education. When I went to school, we didn’t have all those achievement tests or things like that. The state merit is completely out of control.

That said, if Dalton City Schools were allowed into the city government health plan, it would save city schools $1 million per year and give teachers far better coverage. If Whitfield County Schools did the same thing, it would save them $2 million and give their teachers better coverage. The state should allow local school systems to buy their own health insurance wherever they can get the best deal for their employees. But the centralized government approach has ended up with a state merit system that’s uncompetitive from a price and coverage standpoint.

Is it safe to say you’re opposed to Medicaid expansion?

On both sides of it. Keep in mind this state is expanding Medicaid as we speak with our poor economic policies. We’ve increased Medicaid spending in this state by about $300 million in the last two years alone. If we don’t do something soon, it’s going to consume our state budget over the next four years.

At the federal level, some people argue that we’re already being taxed for that expansion, and not opting in is poor stewardship. Why not expand Medicaid?

People misunderstand health care access with health insurance. I’m in the insurance business. What good does having health coverage do if a doctor won’t see you? The more you expand Medicaid, the less the reimbursements are going to be for doctors and hospitals. The most successful doctors and hospitals are not going to see the Medicaid patients. It’s simple economics. You’re not expanding health care by expanding coverage. You’re giving people somewhat of a straw man — you’re giving coverage but it’s no good because you can’t go anywhere. They end up in expensive emergency rooms. Doctors more and more aren’t going to treat Medicaid patients as the reimbursement continues to decline.

That is no solution. It’s time for a businessman to run this state, not professional politicians who don’t understand simple economics. People also need to understand, with the expansion of Medicaid or the Obamacare bill itself, is that this country in this century — for 13 years — has gone from first to 11th in worldwide freedom rankings. We’ve fallen below Canada. We’ve gone from second to 16th in worldwide economic freedom rankings. As of this year, we now just regarded now as a “mostly free” economy. I don’t think it’s a coincidence that it’s taken our economic vitality. All Obamacare and Medicaid expansion does is get more people hooked on the federal government. If government expands, your freedoms decline.

Ethics is an issue that you’ve claimed separates you from Deal. How would you improve ethics at the statewide level?

I’m firmly convinced that the biggest deficit this country is facing right now is not the budget deficit, it’s not trade deficit. It’s the trust deficit with our federal, state, and local officials. You can’t have a freely functioning democratic republic if the people don’t trust their government. That’s the first thing we need to do in Georgia. They’ve already decided it was important for school boards, city councils, and county commission to have open meetings. The Legislature exempted themselves from that. They need to be under the same open meeting laws that local governments are under. It’s amazing how much better government gets when you let the sun shine in.

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Secondly, we have a campaign finance and ethic board. What good does that do when the very people they’re investigating — particularly the top officials such as the governor, lieutenant governor, and speaker of the house — appoints that commission? It needs to be totally separate from the powers that be and have some type of automatic funding where you can’t cut their budget. As long as there’s distrust with our government, we’re going to continue spiraling down as a state and a country.

This is supposed to be a government of the people by the people, but if you don’t let the people know what’s going on, you don’t have that. ... That’s just wrong. That’s why it’s extremely important that anything we do with budgets, finances, or taxes is done in completely open meetings and not negotiated between Senate committees and House committees before being sprung on everybody the last day of the session. I don’t think any tax bills should be introduced unless it’s the first week of the legislative session.

On a different topic, where do you stand on gun rights? How do you feel about Georgia’s current laws and efforts to expand Second Amendment rights across the state?

I had no issue with campus carry. Campuses in Georgia, such as UGA, are like cities. I’d assure you that bad guys would carry guns on that campus — law or no law. I don’t have a problem with law-abiding citizens being able to protect themselves. For me, it’s more than just a gun issue. It’s a freedom issue. I’m alarmed at the loss of freedoms in this state and this country. We’re not too much further from the day when we’re going to wake up and say, “What happened?”

One criticism of Deal is that he doesn’t always have Atlanta’s best interests at heart. How would you be different?

I wouldn’t do any more for Atlanta than I would for Dalton or Columbus or Valdosta or Savannah because they all need the same thing. Number one: If we don’t get Georgia’s economy to grow again above trend, this poverty wave we’ve created over the last 15 years is going to overwhelm everything we’re attempting to do in this state. We have the fourth-highest long-term unemployment rate in the country. A lot of that’s centered in the Atlanta area itself because a lot of people who got laid off from $80,000-, $90,000-, $100,000-salary jobs, they’re not going to take a $20,000 per year job. We have the fifth-highest poverty rate in America. The four states above us are far smaller than we are. When you’ve got 10 million people and a poverty rate above 20 percent, that’s tough to handle. I could go on and on with the dire economic statistics, but we’ve got to get the economy moving again.

Atlanta needs the same thing as, if not more of, the rest of the state. Taxes are too high. Whether you believe in high taxes or low taxes, one thing people deserve is that if you’re paying a dollar in taxes, you deserve a dollar in services. If you’re paying 50 cents in taxes, you deserve 50 cents in services. Right now, Georgians, particularly those in the Atlanta area, are paying high taxes and not getting the services and infrastructure you’re paying for. A lot is going toward wasteful bureaucracy whether it’s too many employees, too many benefits. We’ve got to get government downsized from a standpoint of where our tax money is not being eaten up by employment overhead and is going to new infrastructure and investments.

When it comes to the city of Atlanta, if voters believe in faster economic growth, limited government, and more freedoms, that’s why they should vote for me. If not, vote for the professional politicians because they believe in centralized power and centralized government is the best way to go. I think you’re seeing the results of that.