§ 48-8-111.1 Application of article to consolidated government
Thursday, September 30, 2010
For the nerdy among us (and we all know you’re out there*), here are the relevant O.C.G.A. sections governing the Unified Government’s proposed SPLOST 2011:
§ 48-8-111.1 Application of article to consolidated government
(b) The tax authorized by this article, if imposed by a consolidated government, shall not be subject to any maximum period of time for which the tax may be levied if general obligation debt is to be issued in conjunction with the imposition of the tax. In such case the resolution or ordinance calling for the imposition of the tax shall not be required to state a maximum period of time for which the tax is to be levied; and the language relating to the maximum period of time for which the tax is to be levied shall be omitted from the ballot. The resolution or ordinance calling for the imposition of the tax shall state the maximum amount of revenue to be raised by the tax, and the tax shall terminate as provided in paragraph (1) or (3) of subsection (b) of Code Section 48-8-112.
§ 48-8-112 Effective date of tax; termination of tax; limitation on taxation; continuation of tax
(b) The tax shall cease to be imposed on the earliest of the following dates:
(3) As of the end of the calendar quarter during which the commissioner determines that the tax will have raised revenues sufficient to provide to the county and qualified municipalities within the special district net proceeds equal to or greater than the amount specified as the estimated amount of net proceeds to be raised by the tax, unless the provisions in paragraph (1) of subsection (b) or subparagraph (b)(2)(A) of Code Section 48-8-115 are applicable, in which case the final day of the tax shall be based upon the length of time for which the tax was authorized to be levied by the referendum.
Now that we have dispensed with the legaleze, let us engage in a bit of analysis that necessarily flows from these statutes.
The various iterations of SPLOST imposed by the Unified Government in the past were all governed by other O.C.G.A. sections that denoted the levy would be applied until a fixed amount had been collected or for a fixed time period, whichever came first. SPLOST 2011 will be the first time that the tax will be levied until it raises a specified amount, regardless of the amount of time required to reach that amount – as I read the statutes, this option that is not open to other governmental entities such as counties, cities, or school districts. As noted below, since they began in the mid 1980s the Unified Government’s various SPLOST levies have steadily increased in duration and cost.
After months of telling us that they were working on ways to pare back projects for the upcoming SPLOST 2011 ballot resolution, the Mayor and Commission simply forewent any heavy lifting by tacking on another year and stuffing in another $25 million of additional spending, bringing the ballot resolution’s total up from an approximately $170 million to $195,272,000, an increase of about 15%.
According to a telephone conversation I had a (good) while back with John Culpepper, the Unified Government’s Finance Director, SPLOST collections in Athens-Clarke County have traditionally averaged about $21 million per year. During the current economic downturn, however, that figure has dropped to about $19 million per year. As noted above, the original proposal for SPLOST 2011 was to levy $170 million in taxes over eight years, for an average of $21.25 million per year. The list of projects approve by the Mayor and Commission calls for a levy of more than $195 over nine years, which works out to $21.70 million per year. So, we are going to spend even more per year over an even longer period of time, on the assumption that the tax will bring in 14.2% more money per year for almost an entire decade than it does currently ($21.70 million per year as opposed to approximately $19 million per year). Such a projection impresses me as optimistic in the extreme – and how. Strike one.
Several of its various projects (Rails-to-Trails, the Greenway, etc.), SPLOST 2011 will continue the unsustainable practice of taking more of the county’s taxable land off of the property tax base. In this, the smallest county in the state by land area, in which a tremendous amount of what property exists is already exempt from property tax, the policy of using a tax levy to reduce the property tax base occurs to me as fiscally incoherent. Strike two.
Like all of its predecessors, SPLOST 2011 is being sold to the voting public as a way of limiting property tax increases. That being the case, how does one account for the anticipated increase in operating expenses, estimated at more than $3 million annually, that will accompany construction of its projects. The obvious answer is, of course, by an increase in property taxes, which are typically local government’s single largest source of revenue. This obvious paradox seems self-evident to me. Strike three.
So how do we fix this? First, the specific; vote down the current SPLOST 2011 proposal. Let the Unified Government come back with a more reasonable package for the voters next year. Second, the general; make a series of changes to the state laws governing SPLOST levies statewide.
Restrict the collection period to a maximum of four years as in the original SPLOST legislation; you know, a period over which we may (emphasis on “may”) be able to reasonably project tax revenues - not the almost decade-long travesty with which we have been presented. Such duration would have the additional benefit of corresponding to election cycles, rather than extending over multiple election cycles during which entire crops of elected official may cycle through office with no say in the development of the SPLOST project lists they are expected to implement.
In that same vein, limit SPLOST ballot resolutions to general election dates, when voter turnout is likely to be the highest. This would result in such resolutions being voted on by a broader cross-section of the community, rather than being decided by the much smaller number of special interest (though admittedly more highly motivated) voters who turn out on special election dates.
Require the voters to approve specific projects by a majority vote as opposed to having to cast all-or-nothing ballots on a laundry list of projects. Of course, the pols would not like that, as they now load up such lists which pet projects for specific interest groups so as to get them all to vote for the entire list (see above).
In that same vein, require more specificity as to the project list. I realize that current statutes and case law do not stipulate much in the manner of such specificity – and that is a problem, for which the years-long Tennis Center debacle serves as a prime example. We are legally required to build the damned thing, but the political questions of where, when, or what “Tennis Center” really means precipitated years of teeth-gnashing and hand-wringing that needlessly divided the community.
Of course, none of these proposed changes is unique to me, as principled opposition to the SPLOST 2011 levy has sprung up across the political spectrum – something I am sure is not sitting well with the folks down at City Hall.
*Apologies to Red Rider.
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Posted by James at 10:28 AM