Georgia voters this November will have more to ponder than just who should serve in Congress and the White House.

They'll also be faced with a seemingly arcane question: Should cities and counties be allowed to use school property tax money to help pay for redevelopment projects?

RENEE' HANNANS HENRY/AJC (ENLARGE)

West Highlands Development is one of three TAD-funded projects currently jeopardized by a state Supreme Court ruling that said school property tax revenue cannot be spent on it.

THE STORY SO FAR • Previously: The Supreme Court ruled in February that school tax money may not be spent on community redevelopment projects, even those such as the Beltline in Atlanta that are in a tax allocation district. • The latest: The Georgia Legislature responded by passing a resolution calling for a statewide referendum to change the state constitution to allow school tax money to help foot the bill for redevelopment efforts inside tax allocation districts. • What's next: Georgia voters will vote on the issue in the general election on Nov. 4. RELATED LINKS: • More Metro news • Metro photo galleries

The state Legislature passed a law in 1985 allowing the practice, helping a number of projects spring to life — most notably Atlantic Station, the sprawling retail, housing, hotel and office complex on the site of the former Atlantic Steel mill near Midtown. But the Georgia Supreme Court ruled in February that the state constitution prohibits school tax money from being spent on anything other than education.

The decision roughly cut in half the tax subsidies available to redevelopment efforts across the state, from Atlanta's Beltline loop of trails, transit and parks to Smyrna's effort to overhaul aging shopping centers. Some developers began scaling back or even shelving plans altogether.

Amid an outcry from local governments and developers, the Georgia Legislature passed a resolution this past session to hold a statewide referendum on a constitutional amendment that would allow school tax revenues to once again help fund redevelopment projects.

The vote could prove contentious.

Critics have applauded the court's ruling, saying school tax money is far too valuable a resource to subsidize development costs. They say some projects receiving financial help would have developed without any aid and are essentially robbing cash-strapped school systems of needed revenue. They also say homeowners outside the tax allocation districts, or TADs, will be stuck paying to educate students living in new homes built inside the TADs.

"School funding is always a problem," said Lindsey Tippens, a Cobb County school board member. The referendum's passage could result in "a flood of people wanting to tap the till of public education coffers to fund private development."

TAD referendum supporters say school tax money is critical for redevelopment efforts, which can be risky and expensive. The projects sometimes require costly demolition and environmental cleanup. They often are located in areas where land costs are high or in blighted areas that carry a real risk of financial failure.

Without the subsidies, developers say, blighted areas would remain troubled places. It's far easier for developers to build on the suburban fringes, where land is cheap and there are fewer logistical headaches, said Bill Campbell, senior director of development with Barry Real Estate.

"If not for incentives, [developers] will just go farther and farther away," Campbell said during a recent meeting of the DeKalb County Chamber of Commerce. "They're going to cow pastures, that's a lot easier."

For the Beltline, the loss of school tax funding may make it more difficult to pay for big-ticket items such as the planned light rail line along the 22-mile route.

A coalition of developers and business groups that formed to lobby the state Legislature this past session plans to mount a campaign in the fall to persuade voters to support the TAD referendum, said Ken Bleakly, a real estate and economics consultant who has worked on redevelopment projects and heads the group, known as the Georgia Redevelopment Coalition.

The redevelopment projects at issue are funded through the creation of tax allocation districts around a particular area, such as a run-down section of town. To pay for redevelopment efforts, any increase in property tax revenues that occurs in the district is diverted from the local governments and school systems that choose to take part in the TAD. The tax revenue stream is restored when a TAD expires, typically in 25 to 30 years.

Referendum supporters say TADs have been widely misunderstood as taking money from school systems. School districts will continue to receive whatever tax revenue they've been collecting in the TAD area, Bleakly said. Only increases in the tax base — the increment — is diverted.

Then, when the funding stream is restored, the argument goes, schools, cities and counties will receive far more tax revenue each year than they would have otherwise because the property will be much more valuable.

Bleakly said it doesn't make sense to prohibit schools districts from participating in TADs just because some projects seeking their aid might not deserve the assistance. Local school systems may opt out, he noted.

"All we're asking voters to do is give their local school system the option of participating in TADs," Bleakly said. "To throw out the tool seems a draconian measure."