Agencies fund TAD backers’ ballot effort

Taxpayer-supported public agencies are helping bankroll a group that’s seeking to persuade Georgia voters to say yes to using school tax subsidies for redevelopment, campaign records show.

In doing so, the groups are walking a fine line drawn to ensure that governments don’t use tax dollars to push political causes or candidates, government watchdogs said.

Georgians for Community Redevelopment is registered with the state to campaign in favor of Amendment 2, a Nov. 4 ballot measure that would let tax allocation districts, or TADs, tap school levies for redevelopment projects.

The campaign group has collected $5,000 from the Atlanta Housing Authority and $55,000 from three special tax districts called community improvement districts, a report filed last week shows. The districts tax business properties within their borders to pay for things such as new sidewalks, parks or streetlights.

In most cases, state law forbids governmental entities from giving money to political campaigns, including those focused on a ballot initiative.

The State Ethics Commission won’t issue an opinion on such contributions unless it receives a formal complaint. If it did, it would investigate whether Georgia tax dollars were wrongly used in an attempt to influence voters, Executive Secretary Rick Thompson said.

The commission would look at the source of the contributions, their handling by the campaign group and how they were spent, he said.

John Woodham, the Atlanta lawyer who successfully sued over TADs’ use of school money, wrote in an e-mail Friday that he believes the campaign contributions may violate state law. He said he has reviewed contribution rules and spoken with Ethics Commission staff.

“I think all Georgians should be very concerned when state ethics laws are violated in connection with a statewide constitutional amendment referendum,” he wrote. “The state ethics laws are in place to protect the public and its trust in the election process.”

Leaders of three community improvement districts said they donated only after being assured the money would be used for an education effort that explains the amendment without urging voters to take a side. A mailer that does not advocate a position is supposed to go out this week, said the campaign group’s president, A.J. Robinson.

“We are not using the money to say ‘vote yes’ on any material,” he said. “We’re using the money to explain what the amendment does.”

But ethics watchdog Common Cause Georgia questioned whether a group set up to advocate could be neutral.

“Do we really believe all this money is flowing into Georgians for Community Redevelopment solely to educate the public and not to affect to the outcome of the vote?” Executive Director Bill Bozarth asked.

The group may have figured out how to segregate the money, he said, but “if it walks like a duck, that’s what it is.”

The housing authority’s donation came with no requirement that it be limited to education, and it can be spent on advocacy, Robinson said.

Housing authority spokesman Rick White said the agency made the donation with money it collected working as a subcontractor for a federal contractor. No tax dollars were involved, he said. The U.S. Housing and Urban Development Department prohibits using federal money or rent collected from public housing projects for political purposes.

White said it was appropriate for the housing authority to use its private money to take a stand on tax allocation districts. The agency also gave $5,000 to the Georgia Redevelopment Corp., whose lobbyist promoted legislation putting the amendment on the ballot.

“It’s not only appropriate, it’s obligatory,” White said. “Our whole mission is to ensure that there is affordable, decent housing available for families that are low income. The TAD strategy has been critically important to a good majority of the revitalizations that have happened in the city.”

The questions about contributions come at a crucial time for TAD supporters, who are hoping to restore the financing tool after a blow earlier this year. Developers across metro Atlanta shuddered in February when the Georgia Supreme Court ruled that public school taxes could no longer be used for the subsidies.

For roughly two decades, developers had routinely asked school, county and city officials to freeze property tax payments in blighted areas for a period of time. Instead of paying higher taxes when property values rose, developers could use the money to pay down project costs.

Critics of the strategy say tax money that belongs to schools should not fund developers’ costs.

In an Oct. 8 letter to the Gwinnett Place Community Improvement District, Robinson wrote that Georgians for Community Redevelopment was counting on $265,000 in pledges: $100,000 from four other CIDs, and $165,000 from private sources.

The CID money was going toward focus-group research and an educational video to play on public-access television, the letter said.

The campaign group was creating a plan for “how to best educate” Georgia residents about the amendment, the letter said.

“We believe the focus groups will tell us which method is the most effective (direct mail, TV, radio spots, etc.) …” it said.

CID leaders said lawyers had vetted their contributions, and they do not violate state or federal laws.

“We are quite comfortable with our involvement in the educational component at this time,” said Malaika Rivers, executive director of Cobb County’s Cumberland CID, which pledged $25,000.

A concern is that voters won’t grasp the amendment, said Chuck Warbington, executive director of the Gwinnett Village CID.

“The issue we are dealing with is people don’t understand what any of these ballot initiatives are,” he said. His CID is developing a plan to create a TAD in southern Gwinnett, he said. “Whether Nov. 4 passes or not, we’re going forward with our tax allocation district,” he said.

Thompson, the ethics executive secretary, said that in another recent case, the Ethics Commission found a violation might have occurred when a southwest Georgia organization accepted contributions from cities and counties for economic development work, but then advocated on behalf of a sales tax referendum. The case is pending.

Developers see TADs as tool; others question fairness

A teachers association and a taxpayer advocacy group are lining up against the pro-redevelopment push for constitutional Amendment 2, which voters will consider Nov. 4.

The opposing sides disagree on whether school tax dollars should be used to sweeten revitalization efforts in areas that otherwise might not lure developers. At issue is the creation of special tax allocation districts, or TADs.

Here’s a look at how they work, what the two camps are saying — and why a major Georgia education group is staying out of the fray.

The language:

“Shall the Constitution of Georgia be amended so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use tax funds for redevelopment purposes and programs?”

The reason:

Acting on a taxpayer’s lawsuit, the state Supreme Court ruled in February that school tax money could no longer be used for redevelopment. School taxes typically account for roughly half of the money involved, and TAD proponents said county and city taxes alone aren’t enough to carry some projects.

The mechanism:

When government officials establish a tax allocation district, or TAD, they target a defined area for redevelopment and freeze the property taxes for a specific time, usually 20 to 25 years.

A developer takes responsibility for new government-issued bonds, using the money for upgrades such as road work or site cleanup.

Rather than paying higher property taxes as the improved land becomes more valuable, the developer pays off the bonds.

At the end of the freeze period, the government begins collecting the higher taxes.

Some governments, including school boards, have negotiated to gain some benefits from developers upfront, before the TAD expires. For instance, when Atlanta’s school board voted in 2005 for a Beltline tax district, members negotiated millions of dollars to build and maintain school and recreational facilities.

School, county and city boards have a choice as to whether they participate in a TAD.

Sitting this one out

The Georgia School Boards Association chose not to take a position. That’s because school boards still could reject TADs they didn’t like, said Don Rooks, the association’s director of legislative services.

“As long as it’s up to each local board, we’re fine with it,” he said.

In favor of the amendment

Georgians for Community Redevelopment is led by A.J. Robinson. The group counts supporters of Atlanta’s Beltline, developers and the Metro Atlanta Chamber of Commerce as supporters, according to a campaign report filed last week. Falcons owner Arthur Blank gave the group $10,000.

“The critical thing, I think for us, is why would we take this tool out of the toolbox?” asked Robinson, who also leads a downtown revitalization group called Central Atlanta Progress.

Supporters say TADs have benefited difficult redevelopment projects such as Atlantic Station. Projects such as the Beltline of transit and parks planned to use the approach.

“Without TADs, no new economic development or revitalization project will happen for a long time,” said Amanda Rhein, a senior project manager for the Atlanta Development Authority.

Against the amendment

No unified opposition has formed.

The Georgia Association of Educators, however, is urging voters to reject the amendment, saying students’ needs should trump developers’ desires.

John Sherman, president of the Fulton County Taxpayers Foundation, said his group is concerned that taxpayers outside the district for years will pay extra for services inside the district because a chunk of the tax revenue is going to pay off bonds.

“We’re really against the use of school taxes, but we also feel the use of TADs themselves are not fair to the taxpayers,” he said.

DeKalb County’s school board has voted against TADs, with members saying the development tool would rob them of desperately needed revenue. A report last year estimated the DeKalb system would lose as much as $126 million over two decades if it agreed to several proposed TADs.

Things to consider:

• New development brings new people, who require expanded city services, said Dan Immergluck, an associate professor in city and regional planning at Georgia Tech who has studied the proposed Beltline and development in Atlanta. Those have to be paid for. “Right now, the provision of public services, it’s all ad hoc…,” he said. “You are going to be drawing people into this city with this thing, and you had better provide public services.”

• Rather than a statewide prohibition on using school tax money for development, the amendment would leave the TAD decision — and any negotiations — to local school boards. “It’s only as good as the staff and elected officials involved in the negotiations,” said Sam Olens, chairman of the Cobb County Commission and the Atlanta Regional Commission.