Home > Thinking Right > Archives > 2008 > May > 20
Tuesday, May 20, 2008
TADs: If you don’t know, vote ‘no’
The Atlanta Journal-Constitution
The proposal on the November ballot that will invite Georgians to divert the property taxes they pay to support schools to benefit developers is, in the words of Georgia State University President Carl V. Patton a vote for “local decisions about local funding of local projects to remain local.”
That’s his analysis of Senate Resolution 996, one of the three proposed constitutional amendments on the November ballot. It grates a bit that the three measures that would enshrine permanent tax relief in the Constitution all had paid advocates, while the measure that didn’t get to the ballot —- ad valorem or income tax relief for ordinary Georgians —- had none.
Interesting that Patton, writing in the AJC in support of Atlanta’s BeltLine rail project, frames the question on the November ballot as local, local, local, local. That’s almost as misleading as the actual wording on the ballot. The question:
“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 more honest question would be: Shall the Constitution of Georgia be amended so as to give tax revenues to developers for up to 30 years that is now allocated to support public education?”
The answer to the latter question is most likely no.
As presented to voters in November, and as explained by Patton, the answer will most certainly be yes. The reason is that voters can’t possibly know what they’re being asked to enshrine in the Constitution.
The local, local, local amendment comes about because the Georgia Supreme Court ruled unanimously in February that the state constitution prohibits school tax money from being spent on anything other than education.
A 1985 law intended to help local governments redevelop blighted areas is at the heart of the controversy. It allowed authorities to float bonds for redevelopment of blighted areas, with the appreciation in property values for up to 25 years being diverted to pay off the debt. Cities, counties and school boards would waive the appreciation.
There’s some justification for the concept and for the financing mechanism. Write a definition for “blight” that truly limits property tax giveaways to redevelopment of genuinely blighted areas, and there’s merit in the proposed constitutional amendment.
The downsides are that cities such as Atlanta that are financial basket cases shouldn’t be giving away future revenues to incentivize development that would likely come anyway. If it’s giving away future revenue, the redevelopment incentives should be reserved for areas such as some neighborhoods in the northwest part of the city, or south of I-20 where developers are not likely to venture without a strong inducement.
Even there, a second downside still exists. It’s this: Every child brought into the school system by the new development has to be educated at somebody else’s expense. Why? Because the property taxes the child’s parents pay are diverted from the school system to pay development-related debt.
Patton can argue that this is local, local, local because the school board can say no. But the pressure on local boards is enormous and few can resist.
The taxpayers who bear the burden are those who come after the politicians who approve the arrangements are out of office.
The problem with TADs now is that they’re being used to fund development that would occur any way. Areas are not blighted. They are immediately in the path of development or are attractive for redevelopment because of location and existing infrastructure. They’re not blighted —- and when they’re not, the gift of tax revenues for decades to come is corporate welfare, plain and simple.
Rule of thumb on proposed constitutional amendments such as this Tax Allocation District question: If you don’t know, vote no. And be warned: You can’t rely on ballot phrasing for an clear summary of what it does.
Permalink | Comments (128) | Post your comment | Categories: Column
.JPG)
-1.JPG)
Services »
