Get Schooled

By Tony

February 21, 2008 9:32 AM | Link to this

I do not believe tax money from local governments should be used for making developers richer. If investors want to risk their funds on a project, that is good. Spending tax money in a way that directly benefits a few private citizens should be prohibited.

School taxes should be spent only on the educational needs of students. Should citizens of a local community want to impose a special tax on themselves for projects that benefit everyone they should have the right to do so. However, using a portion of school taxes should be off-limits. These taxes are assessed for a specific purpose and that purpose should not become clouded.

By HS Teacher Too

February 21, 2008 9:38 AM | Link to this

School money should go to schools. Anything otherwise should be illegal.

I am not convinced that I understand TADs, however. Maybe someone can tell me more about them and explain why my perspective may be incorrect.

By jim d

February 21, 2008 10:27 AM | Link to this

Personally I’ve had a bit of a problem with TAD’s since they were legalized back in 85 in ga.

I don’t think this battle is over yet.

By JustMe

February 21, 2008 11:48 AM | Link to this

I completely disagree with TADs.

If there is too much money going to schools from taxes (which I doubt), then reduce taxes.

If there are other projects that need funding, then find other ways to get the money than faking out the tax payers. They can raise the money through other means such as increasing sales tax, etc.

I very much hate the thought of politicans having free reign to shuffle money like that.

By Ernest

February 21, 2008 12:12 PM | Link to this

This is an issue that has many sides to it. Let me suggest going to your favorite search engine and typing tax increment financing as key words for more insight on this. This term is used by other states whereas GA is the only one that refers to this as TADs.

Constitutionally speaking, this was the correct decision. I’m sure that is why there was a unanimous vote by the State Supreme court on this. It will be interesting to see if our legislature attempts to request an amendment to the state constitution that will enable this to happen. It will also be interesting to see how both sides ‘spin’ their points, for and against this.

From an economic standpoint, I believe it could put GA as a disadvantage with regards to competing for economic development projects. If other states provide the ability to pay of bonds with ‘growth’ dollars whereas GA does not, what will this do to our construction industry in the short term? Dollars are getting tight and I wonder if there is some other mechanism that would encourage new developments.

My understanding is TADs/TIFs were developed to be used in areas of ‘blight’ that were not generating much in property tax revenue at the time. One can reasonably question whether the North Druid Hills area meets that definition. One could understand its use for the Atlantic Station property.

By momtoAlex&Max

February 21, 2008 2:48 PM | Link to this

@Earnest: In response to your question:

what will this do to our construction industry in the short term?

In the short term, there might be some belt tightening. Eventually other solutions will pop. Like issuing bonds, or getting investors, or anything. Why should a developer get rich on the backs of taxpayers???? If the project is worthwhile, someone will fund it one way or another. Like we fund our schools when the government fails (i.e. in my school the foreign language program has to be funded by a foundation)

Maybe they should hold bake sales and sell gift wrap to raise money instead of schools.

Until schools are fully funded, NO TADS!!!!!

By Koala

February 21, 2008 3:07 PM | Link to this

Can’t you all see the big picture on this? We are talking about developing or redeveloping blighted property that is making little to no tax revenue for the State. After the development, it will make tens of thousands or hundreds of thousand of dollars for the schools that they would never have gotten. So sad. Now we are stuck with the blighted property, and no additional tax revenue for the schools. Which frankly, is like pouring money into a black hole, but THAT’ a whole ‘nother story!

By Chip

February 21, 2008 3:16 PM | Link to this

Generally speaking, TAD’s are used to fund infrastructure for projects that otherwise would not be possible.

Those who don’t want to “make developers richer” must not understand that once the bonds used to pay for public infrastructure are paid off, the school system benefits from a much larger tax base than it would have had if the TAD had not enabled the project.

Do you think Atlanta schools would have preferred keeping the Atlantic Steel Mill and its tiny tax revenue, or be in a position of looking forward to a huge future windfall from Atlantic Station?

By JustMe

February 21, 2008 3:53 PM | Link to this

Earnest, Chip, and others….

I don’t mind using tax dollars for the general good. The problem is when tax dollars are collected for one purpose (schools) and then reallocated by the politicans for another purpose.

In business, that is illegal and called ‘bait and switch.’

I could understand this practice in a rare emergency case only. But, to use it regularly is wrong.

If politicans see a need for tax money, they should do the right thing and allow citizens to vote on it and/or collect it honestly another way rather than steal if from school tax money.

By Brian

February 21, 2008 3:56 PM | Link to this

Yes, the schools are saying “give the dollars to us” when there wouldn’t be any dollars to begin with without the TAD investment.

I do agree with what someone said though — perhaps we need to more clearly define what areas are eligible so it is in areas that truly need incentives for investment. North Druid Hills area is probably not one.

By Matt

February 21, 2008 3:58 PM | Link to this

Although I don’t think funding for education should be turned into development money, I think people are not thinking outside of the box about this issue. Using education funds to increase the property tax base is very similar to using mutual funds to a 401k, its an investment in the surrounding area. To me, an arguement can be made that schools are using these funds now to increase funding in the future. There by allowing future funds to be increased without an increase in the millage rate.

However, I think that education funds should be solely limited to actual education spending (teacher salaries, supplies, building construction/maintainence, etc). A possible solution to this problem would be to allow citizens of a county to increase their millage rate to allow for these types of developments to occur. SPLOST is another example of a way to have your cake and eat it too.

By R1070

February 21, 2008 4:02 PM | Link to this

With Georgia’s schools already so far behind most of the country. They actually need to pump more money into them. Not take away money to build something. Yes I know in return that the investment will provide more tax dollars in the end but can’t that money for the TAD be produced another way?

By mmm

February 21, 2008 4:14 PM | Link to this

I understand the concept, and there may be a few select areas where the concept makes sense. The problem has been that it now is like cotton candy for the politically connected. It is being misused if it happens in even a quarter of the places where it has been suggested. I could see participating by the school district ONLY in cases where the proposed development is expected to add no school aged children to the school system for the duration of the TAD. Otherwise we are simply asking the next generation or other taxpayers to pay the costs of the shinny new toy we can’t wait to get.

By Matt

February 21, 2008 4:33 PM | Link to this

This is a long post, so sorry for being long winded.

I think there are several issues here that need to be discussed prior to the issuance of a TAD. First and foremost, why do schools need more money? Is it because we think that if we throw more money at the problem, we’ll eventually fix it? Is it because we spend less than other states on education? Personally, I think the business of education is very lucrative. With that being said, please note the business of education or the educrat (beauricrat in education). These are the individuals who get hired as a Social Studies’ Specialist, who gets paid 100k+ to be the liason between the States DOE and the County’s BOE. Now, these positions may truly be necessary, but I think that the intense focus on standardize testing as being a measure of performance is the main issue. Unfortunately, I think what happens is that people get too focused on numbers (comparitive scores and statistics) to understand what really is going on. Under the current education formula, every student in Georgia is being prepared to go to college. Everyone is required to take the SAT, everyone is on a college bound track, if you don’t go to college you are considered unskilled and unworthy of any job (that’s why we have UGA grads getting out of college and only job they can find is one managing a Sonic).
Personally, I think we should reinstate funding that allows schools to develop technical tracks (such as wood working, auto body, and drafting) and start pushing kids who are likely to fail into these tracks. Our goal should be to prepare them with some sort of skill set so they can succeed.
But back on subject, school systems need to do some major “fat-cutting” prior to the issuance of a TAD. The idea behind this measure would allow these systems to really decided whether or not this is a sound investment. The reason that I like TADs is because it is “creative financing” or something many state agencies are developing. An example is a GDOT. There has been a major financing shortfall from the federal gov’t in years past, and thus states are trying to develop new and improve methods of generating funding for transportation projects. Here is Georgia, examples of “creative financing” are changing the gas tax so its index for inflation, Public Private Initiatives, additional toll roads, and moving to a distance based tax as opposed to a gas consumption tax. I could go further into this discussion (as I am a transportation engineer), but its neither here nor there. Main goal is to increase funding by not relying on the federal gov’t.

I applaud those who came up with this method of increasing total funds, but I realize that there needs to be a better way. I think TADs would have better public opinion if there was more puclic outreach, a seperation from education funds, and overall approval from the citizenry that this effects, not back room dealing and shady politics.

Again sorry for the long winded post.

By itsmeagain

February 21, 2008 4:49 PM | Link to this

I think people are missing the point of the TAD’s. It isn’t like the tax money is being taken from the school, the money is being given to the development from the taxes which have been created by the new development. Point being, the schools will not get any of the money if the TAD’s don’t exist, because the development will not happen, and therefore there will be no tax base.

By Love my 4 kids

February 21, 2008 7:28 PM | Link to this

The Ga. Supremes made a good call. If the people want to tax themselves to fund this new non-education project, then they should vote to do so. Trying to get this money from education funding makes me think that they know they would lose at the ballot box. A free market will always prevail. If there is a demand for something and there is money to be made, it will happen-without the help of government. It is for this same reason that I always vote against a SPLOST. When government workers get their hands on funds out from under the control of the voters they are accountable to, it opens the door wide for mismanagement and abuse of power. If local citizenry want a school building or park they will personally benefit from, then they should pay the tax burden for it. If someone else is footing the bill, then your whining about how bad your government school is will fall on deaf ears! He who pays the piper calls the tune. Our home school is 100% family funded and I relish the freedom of choice that comes with it.

By WFC

February 22, 2008 9:01 AM | Link to this

I am confused by “itsmeagain.” If I’m not mistaken, the TAD money is tax generated CAPITAL taken up front with any potential benefit to schools being way down the line and “iffy” at best.

FOLLOW THE MONEY! Who is going to get richer from this at the taxpayers’ expense? The politicaly well connected, that’s who. If these projects are so great, why isn’t PRIVATE CAPITAL flowing into them?

No TADS until there are no trailers in public schools and teachers make $80,000 per year! Let private money finance these schemes.

By Lee

February 23, 2008 11:59 AM | Link to this

Rule of thumb 1:

Never underestimate the ingenuity of a politician to extract money from it’s citizenry or to find new ways to spend it’s largess.

Rule of thumb 2:

Whenever you hear a politician talking about “investing” your tax money, grab your wallet and run away as fast as you can.

As others have pointed out, if these are commercially viable projects, private enterprise will find a way. Any new project will have it’s risks. The developers are simply trying to shift some of the risk onto the backs of the taxpayer. Don’t fall for it.

What’s next? Condemn private property and hand it over to developers because the original owner is not maximizing the value of the property and by extension, the government is not realizing the full tax potential of “blighted property?”

Oh wait, that is already happening in many parts of the country.

By Ernest

February 23, 2008 12:41 PM | Link to this

Lee, if you are a developer, would you be more likely to ‘invest’ in a project in which TAD/TIFs were in place or one where you have to secure the financing? I submit developers would look for the ‘path of least resistance’ and choose the former. If Alabama is offering this and Georgia does not, where do you think the developer would probably want to go? I for one though it was strange that Alabama, SC, and Tennessee got auto plants in recent years while GA got many ‘promises’ for this type of industry.

Again to be clear, I wholeheartedly agree with the state supreme court decision. From an economic development standpoint, I wonder if GA will be at a disadvantage with regards to new projects.

By catlady

February 23, 2008 2:57 PM | Link to this

I am pretty sure our local county gov’t was wetting its pants planning some sort of TAD in a new area they are intent on developing (to the benefit of several well-connected families, in a residential neighborhood, away from the only town around).

Now, what can be done to recoup the money siphoned off by TADs already approved? How could anyone have thought this was okay? And why would any school system sign off on it? And why would citizens be willing to take on the funding for improvements for a private project? Especially in the current real estate climate?

By Ernest

February 24, 2008 1:08 PM | Link to this

I took my earlier advice and did more research on TADs/TIFs. In Washington state, their state constitution precludes the use of property tax portion to support schools for TIF purposes. What if Speaker Richardson is successful with his proposal to eliminate the school portion of property taxes? Not only will this centralize funding schools with the state but it opens the doors for rampant issuance of TADs thoughout the state. We need to scrutinize this further.