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Has SPLOST Passed Its Prime?
The Atlanta Journal-Constitution
Lots of talk in recent days about the Special Purpose Local Option Sales Tax elections, which are being held in several metro school systems Tuesday, including Atlanta, Decatur, DeKalb, Fulton and Henry.
If approved, during the next five years the taxes could generate more than $2 billion for area school facilities.
The “penny sales tax” — as it is often, although incorrectly, called — has been a popular way for systems to raise money for building new schools and upgrading aging campuses. But raising revenue from an additional 1 percent charge on purchases hasn’t always been foolproof.
Remember a few years ago when Gwinnett County had an estimated $300 million budget shortfall because SPLOST wasn’t generating enough money? Board members there had to turn to the county development authority to bail them out with an unusual lease-purchase arrangement.
The taxes up for renewal Tuesday are now 10 years old. If a majority of voters agrees to another extension, those SPLOSTs will live on for five more years. So answer me this: Is it time to find a new way to finance school construction or is the current system working?
UPDATE: Apparently voters are happy using SPLOSTs to pay for schools. According to my colleague Kristina Torres’ story, all of the taxes were renewed Tuesday by overwhelming margins.





DEL.ICIO.US


Comments
Commenting is now closed for this entry.
By KA
March 19, 2007 8:48 AM | Link to this
SPLOST is still the way to go. Gwinnett got into trouble because the commissioners approved way too many subdivisions, which created a financial burden on county infrastructures and the school system with the increased number of school kids. What Gwinnett needs is to stop subdivision growth and encourage more business development, which brings in more tax revenues. Invite more businesses into the county, expand the sales tax revenues, and hopefully the county won’t have to increase the millage rates for property taxes to fund school construction.
By high school teacher
March 19, 2007 9:22 AM | Link to this
SPLOST is better than raising property taxes, IMHO. One of the above must happen to keep up with current growth.
By JustMe
March 19, 2007 9:24 AM | Link to this
I feel that SPLOST has become mainstream when this is not what was intended.
School systems should work within their budget and not rely on any special taxes. I especially do not understand why APS needs any type of SPLOST! The property taxes are sky high and there are tons of ‘owners’ paying outrageous property taxes on tiny condos - and most of those folks are single without children!
SPLOST is over used. I live in Atlanta and will vote against it.
By jim d
March 19, 2007 9:32 AM | Link to this
Here’s the problems with a SPLOST tax that never goes away.
The main problem is that it provides too much. and since Politians aren’t known for their ability to not spend money when they have it. What happens?
Well in Gwinnetts case a few years ago they borrowed against projected tax revenues that never materialized. They were then forced to Enter into these lease purchase deals, in essence saddling taxpayers with long term debt without a state contituionally mandated referendum required before endebting tax payers. This move all but quaranteed that future SPLOST referendums would be passed.
In my opinon these SPLOST’s are like a trough full of slop and the hogs will continue to feed as long as we keep refilling it.
By Ernest
March 19, 2007 9:33 AM | Link to this
JustMe:
Point of clarification, APS will receive proceeds from SPLOST because parts of it exists in Fulton and DeKalb counties. By law, all school systems within a county receives an ‘equitable’ portion of SPLOST based on its student population within that county. That’s why APS would receive a small portion if it passes in DeKalb.
Again, I agree with KA, SPLOST is a way to ‘spread’ the responsibilities of addresses capital improvements to many citizens, including non property owners and those that do not leave in your county. Last I looked, school systems don’t change zoning laws or issue building permits. If there was greater collaboration between our local governments and school systems, we might not have some of the challenges we are facing. I say ‘we’ because at the end of the day, ‘we’ own the schools.
It would have been nice if ‘impact fees’ were in place so that developers could be required to provide funding and/or land for schools. In most metro counties, we are almost ‘built out’ for this to have a significant impact.
By jim d
March 19, 2007 9:47 AM | Link to this
I’m with you Ernest,
Let’s make government responsable for collecting from the folks that are causing the problems and demand for more facilities.
YES TO IMPACT FEES!!
By JustMe
March 19, 2007 9:48 AM | Link to this
Ernest,
I fully understand your point. However, I do not feel that APS should need a SPLOST for themselves. If they happen to get a small percentage from overlapping Counties, so be it. But I will be voting against any APS SPLOST!!!
By JustMe
March 19, 2007 10:36 AM | Link to this
Although I much would prefer impact fees over SPLOST, I still think that we need to ensure that school systems or even just the government in general does not collect money unnecessarily.
School systems have to be accountable for thier budgets. This means that they need to stop wasting money on stupid consultants and expensive programs that are not needed. We cannot provide them an open check book to spend what ever they like - and it doesn’t matter where the money comes from.
IMHO, the State of GA needs to do a review of all school system budgets. It is crazy when school system superintendents get paid more than the CEO of Coca-Cola!
By Lisa B.
March 19, 2007 10:53 AM | Link to this
In my rural school system, SPLOST will raise approximately $10 million in five years. Two of our five schools are more than 50 years old, and we must have a new facility.
I like SPLOST because it doesn’t put the entire burden on property owners. It would be unfair to expect property owners along to finance construction of a new school in my system.
By jim d
March 19, 2007 11:01 AM | Link to this
Well just me,
We appear to agree, but let me take the transparency thing to the next level by calling for every school system in Georgia to also make their checking ledgers available on line so tax payers can see where the money is being spent.
There is a movement afoot to get school systems to do this.
http://www.ednews.org/articles/6968/1/How-difficult-is-it-to-get-your-local-school-district-to-post-its-checks-online-each-month-JUST-ASK/Page1.html
By Larry
March 19, 2007 11:10 AM | Link to this
I doubt anyone would object to finding a better way to fund school construction, since this is precisely the issue that resulted in SPLOST when the question was applied to property taxes. Different counties have different needs, which is why these questions are locally decided. The fact that one county may not need a SPLOST has no effect on another county’s needs. Same goes for dissatisfaction with elected officials. The solution is replacing the official, not attacking the funding mechanism. You won’t be happy with the official regardless of how the budget is funded, so be sure you’re trying to fix the real problem. Also, the only thing Gwinnett’s BOE really HAD to do during the economic downturn was stop building schools. Regardless of your opinion of their actions, the fact is these actions were taken to avoid a lapse in the building program, not to avoid default on any existing obligations. Alvin probably knows most of us despise trailers.
By jim d
March 19, 2007 11:12 AM | Link to this
Sorry Lisa,
I do disagree “we must have a new facility” You may want a new facility but the current facilities can be retrofitted with modern technology.
The school I attended as a young boy was over a hundred years old and the age of the building really had no direct impact on the quality of education we recieved. BTW, the building was still standing the last time I went home, 20 years ago, although I will admit it is no longer used as a school.
By Ernest
March 19, 2007 11:12 AM | Link to this
JustMe:
I’m sure you said it out of frustration but the CEO of Coke can make several million dollars a year when you include stock options. I’m not sure many school superintendents make that much.. :) You will get what you pay for sometimes though.
I ‘believe’ audits are done to determine if monies are being spent wisely. The last thing most school board members want is to be accused of not being ‘fiscally responsible’ with taxpayer dollars. You should request to see the budget, which should be online for most school systems these days. Accountability starts with the taxpayers making sure the dollars are spent correctly.
By jim d
March 19, 2007 11:22 AM | Link to this
Larry,
None the less, What Gwinnett did was questionable at best. But then hey, who’s going to question a governmental agency that cloaks financial obligations in secrecey on a regular basis anyway?
By Ernest
March 19, 2007 11:23 AM | Link to this
JimD:
I know you are familiar with the saying, “They don’t make ‘em like they use to”. Part of the challenges now are ‘federal’ regulations, i.e. ADA compliancy, asbestos, etc. In some cases, it is cheaper to build a new school that retrofit an older one.
To Larry’s point and the question, what is the alternative funding mechanism? At least with SPLOST, the residents can decide if they wish to make that investment in their county.
By jim d
March 19, 2007 11:24 AM | Link to this
Uhm Larry,
As I recall the bought sold and leased back the taj mahal there in Suwanee during that same turn down.
Correct me if I’m wrong.
By jim d
March 19, 2007 11:36 AM | Link to this
BTW Larry,
Alvin has never allowed his knowledge of what we like or dislike to influence his actions. You know little things like high stakes testing, buying property in secret or burdening taxpayers with long term debt.
Let’s face it he knows most of us really dispise him but I’m sure he has absolutely no intention of stepping down.
By high school teacher
March 19, 2007 11:36 AM | Link to this
Let me add on to Lisa’s comment, since I work in a county with the same description (west of Atlanta perhaps, Lisa?), and I work in one of the two schools that is 50 years old: it was not a well-built school to begin with. We cannot upgrade technology because the wiring is too old. I only have two outlets in my room. We cannot replace the water fountain at the end of the hall because the pipes were terra cotta pipes. We don’t have heating in the hallways; only the rooms are heated with individual heating units. We have 12 trailers. We need a new facility!
By jim d
March 19, 2007 11:39 AM | Link to this
Hey Ernest,
It didn’t kill us :-)
By jim d
March 19, 2007 11:43 AM | Link to this
HST,
No, buildings can be re-wired and plumbing replaced. The only real problem is that in many areas once you upgrade anything in the building you may be required to bring the entire building up to current codes.
I suppose that could become costly.
By Lisa B.
March 19, 2007 12:11 PM | Link to this
Okay, we WANT a new school, and it would be much EASIER to build a new school than to fix both of the old schools. Neither school has central heat or air, but have do have room units. The ceilings and bathrooms have rotted. The plumbing, wiring, roofs, floors, and walls must be replaced. The buildings haven’t been well maintained, and both have mold problems. We also have bats. Other than these problems, the schools are in fine shape :-)
By JustMe
March 19, 2007 12:14 PM | Link to this
Ernest,
Current audits of school systems are done solely to prevent theif. They do not review to ensure that money is spent wisely or even within the law. For example, I can have on the books that I spent $100 million on a useless consultant and the audit would not raise any red flags. However, if that audit reveals that the consultant was my spouse, then there would be a red flag.
By SET
March 19, 2007 12:17 PM | Link to this
One argument to keep the finding doing and the building program on track is that it is a certainty that buildings and infrastructure built each new year will cost more than the previous year.
The USA is in competition with Chine for sheetrock, ashphalt and concrete, etc. It’s a competition we will lose. The difference between building budgets from one year to the next for the same project is shocking.
Although I would understand withholding funds from the schools as a protest vote, in this instance in view of the data coming in I muct agree that every possible infrastructure project should be built sooner rather than later.
Just as long as you don’t use adjustable rate loans to do it with.
The US Dollar is swirling at the top of the toilet bowl, folks. You had better plan accordingly.
By HS Teacher Too
March 19, 2007 12:21 PM | Link to this
I agree with Lisa B. that a key benefit of any SPLOST helps to “distribute” the tax burden, instead of putting it on a particular sub-group, such as property owners. In that sense, since everyone buys at least consumer goods, everyone is paying at least some of the share. I guess it is analogous to Linder’s “Fair Tax” movement.
But, I don’t trust the idea that the SPLOST has been given what is effectively a perpetual go-ahead, at least in Gwinnett. I’m not as well-versed as many of you are in the spending associated with the SPLOST, but I do find it absurd that GCPS has this expectation of the money continuing to come in in larger amounts. Perhaps we need lesser county offices, and better allocation of the monies? What regulations are in place for how SPLOST monies are spent? I fear that if GCPS lost the SPLOST funds, the resulting cuts would be in all the wrong places.
jim d — do I remember correctly that you are in the contractor business? Seems to me you ought to know that sometimes retrofitting is actually the most expensive route…
By nel
March 19, 2007 12:31 PM | Link to this
SET: You are right but unfortunately, most people don’t see it. The US$ is sinking fast and is no longer the benchmarking currency it was only a few years ago. Anyone who doubts that need only look at what happened to the markets worldwide when the Chinese tinkered with their current market the last couple of weeks. When China sneezes EVERYONE catches a cold! Many, many schools have been left to rot while attention has been paid to buying land and building for the new subdivisions. The chickens have come home to roost. Better today then 5 years down the road when costs triple, and we really can’t afford to make the repairs.
People get elected but they aren’t ever held responsible for their actions enough, so they do what they choose to because people don;t hold them accountable. We are in the mess we are in becuse accountability isn’t even a factor anymore in this country.
By Ernest
March 19, 2007 1:01 PM | Link to this
SET:
Once again, another interesting perspective. Can I assume that you would vote YES if you could in this referendum? :)
JustMe:
Excellent point @ 12:14. Again, that’s where we as ‘watchdogs’ must work together to ensure dollars are spent as they should.
By JustMe
March 19, 2007 1:03 PM | Link to this
SET and nel -
For decades, Countries without leading monatary units have had superior educational systems. In fact, most of them in Europe have better education systems than ours. Our US$ sinking is not an excuse here.
What is an excuse (and a horrible one) is the misuse of our tax dollars (property tax and/or SPLOST) by the school systems. There is no body to over see that the money is used wisely, legally, and in the best interest of education.
For example, Gwinnett wanted to spend their SPLOST that was to be used for buildings, facilities, etc. to purchase laptops. They would have gotten away with it, except for a few good citizens that spoke out. There are regular misuses of money in APS, Gwinnett, Cobb, and so on. For example, they hire over-priced consultants (aka their personal friends) to do ridiculous and unneeded staff development or other ‘work.’
As long as misuse of our money continues, I will vote against any SPLOST.
By jim d
March 19, 2007 1:39 PM | Link to this
Lisa,
I stand corrected.
You do NEED a new facility!
I guess I’m just a bit apprehensive when we have folks doing stuff like this. “The Board had paid $12.5 million for the vacant 370,000 square foot brick building. Now it will sell this building for $17 million to a newly-formed limited liability corporation (LLC), who will also fund an additional $26 million for renovation and other improvements at the site, converting a manufacturing facility into offices and a data center.”
“Not only that, but this LLC will also enter into a sales lease-back agreement, allowing the School Board to buy back its building at a pre-determined price at any time over the next several years.”
Do the math, we will have well over 43 million in a building to house a super and friends when we buy it back at a yet unamed price. Rather than in school houses. I guess I’m one of the very few that find this troubling.
By jim d
March 19, 2007 1:41 PM | Link to this
HS II,
Yes, Your memory serves you well.
By SET
March 19, 2007 4:30 PM | Link to this
To answer the quaestion of how I’d vote: I have a conflict with giving a rotten to the core school system money, and having communities without adequate buildings for civic purposes. Remember, the schools have always been used as staging centers for emergencies and disasters - and I believe we’re about to have some. (I remember the whole population of the region lining up at schools for polio vaccines. I am party to disaster planning for public health here, and the school campuses will be closed and commandeered in emergencies.
I can’t say what I’d do. It would depend on my appraisal of the infrastructure of the place involved. Around here we have several brand new school complexes already. So here I’d say no. For you? I can’t say.