Tuesday, September 28, 2010

Clarke County Local Option Sales Taxes: A Brief History (the SPLOST Trilogy Part 2)

As noted in this post, counties may impose three additional 1% sales taxes in addition to the 4% charged by the State of Georgia.  As will be seen from the information below, the political powers that be here in Clarke County have institutionalized reliance on all three.

The first of these is the Local Option Sales Tax (LOST), the revenue from which is allocated between a county and the municipalities located therein.  Created by the General Assembly in 1975, Clarke County imposed this tax beginning 01 January, 1978 and its collection has continued without interruption ever since.  To the best of my knowledge, unlike SPLOST and ELOST, this levy is not for a limited duration and will be with us forever.

The Special Purpose Local Option Sales Tax (SPLOST), designed to assist counties in fulfilling their obligations as legal extensions of the State, followed in 1985.  Clarke County’s original levy ran for a single year, from 01 October, 1985 through 30 September, 1986.  Following a year and a half lull, that was followed by a second levy running the four years from 01 April, 1988 through 31 March, 1992.  Following a three year hiatus (see below), a pair of five-year levies ensued, spanning the periods from 01 April, 1995 through 31 March, 2000 and 01 April, 2000 through 31 March, 2005.  The current iteration of the levy is a six-year affair, running from 01 April 2005 through 31 March 2011.  The proposed SPLOST 2011 is slated to run for an astonishing nine years.  Note how these levies, which have run uninterrupted since 1995, have steadily increased in duration and, needless to say, cost to the taxpayer.

Finally came the Educational Local Option Sales Tax (ELOST), operating as a variation of SPLOST, which extended this method of funding to county and independent school districts in 1997, though ostensible control of the levy resides with the county government (by state law, a board of education is a “requesting authority,“ as opposed to a county commission, which is a “levying authority; a school board cannot impose taxes in and of itself; it must request its levy though the county government – not that a county commission has the legal authority to deny any lawful request – but that is another matter).  Clarke County’s trio of five-year ELOST levies has run uninterrupted from 01 July, 1997 through 30 June 2002, from 01 July 2002 through 30 June 2007, with the current version running from 01 July, 2007 through 30 June 2012.

All three local option sales taxes that Clarke County possesses the legal authority to levy have become, for all intents and purposes, permanent additions to the tax landscape.  Yes, I realize that these levies are ostensibly “optional” (though to my mind the ballot resolution process was stacked in favor of “pro” votes) and that (usually only a plurality of the county’s registered) voters have approved them.  And yet, the Unified Government and the Clarke County School District exist in a never-ending state of financial paucity – at least to hear them tell it – never missing the opportunity to call for more and higher taxes.

However, I am seeing signs that the great unwashed are finally beginning to wise up about how this racket works.  At least, I certainly hope so.  Defeating a SPLOST resolution can be done, even in Clarke County; local voters defeated a one-year SPLOST ballot resolution back in 1993 by the margin of about 3 to 2, a levy that would have retired general obligation bond debt for the Clarke County Jail and general obligation intergovernmental debt for the ADDA parking deck (my thanks to Gail Schrader at the Board of Elections for helping me track down the details on this, of which I had but a vague recollection).

For those interested, the types and durations of the various local option sales taxes levied by Clarke County can be verified using the Department of Revenue’s Historical Rate Chart (see page 6 of the PDF).

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Anonymous said...

Yes, the local sales tax options have been institutionalized by governments; has this retarded property tax hikes, or prevented things like local income taxes?

"Back-door-tax-increases," aside, is there a correlation between the 'easy' path and the route taken by elected officials? IE, isn't a sales tax easier and safer than a property tax hike?

How does the storm water 'fee' fit into the tax schema? What about the proposed public utility fee on septic systems, etc.?

Is government like a mob that extorts tax payers and threatens to take their homes and property if they don't pay up?

James said...

Has this retarded property tax hikes?

Hardly. See 1) the Clarke County School District, the millage rate of which is at the Constitutionally mandated ceiling of 20 mills and 2) the Unified Government of Athens-Clarke County, the millage rate of which has increased in each of the last three fiscal years.

How does the storm water 'fee' fit into the tax schema?

As I have noted any number of times, the "tax cut" associated with the imposition of the stormwater utility fee was nothing of the sort. Instead of paying the Unified Government our of one pocket (property tax), we are simply paying out of another (stormwater utility fee), as the Unified Government's own budget documents made perfectly clear. And by the way, just a few years later, the millage rate is back up to where is was before the stormwater utility fee kicked in. It was structured as a "fee" for the sole purpose of hitting those property owners whose land is exempt from property taxes.

What about the proposed public utility fee on septic systems, etc?

Even though the Unified Government has no intention whatsoever of fulfilling the provisions of the Charter by extending water and sewer lines out into the formerly unincorporated area of the county, it will be only too happy to charge those of us who live there for the pleasure of still being on septic tanks (by giving the usual excuse of somehow protesting the environment).