Projected capital project spending by department, 2014-2024
Transportation: $552 million
Public safety: $381 million
Parks: $226 million
Information services: $94 million
Property management: $34 million
Fleet management: $30 million
Sheriff: $5.5 million
Elections: $2.6 million
Tax assessor: $1.5 million
Library: $1.2 million
Senior services: $411,000
Magistrate court: $285,000
Probate court: $76,000
State court clerk: $43,000
Government service centers: $15,000
Source: Cobb County Finance Department
Cobb government leaders are again considering a new Homestead Option Sales Tax to meet the county’s ever-growing capital budget needs.
A HOST would eliminate the portion of most homeowners’ property tax bills that goes to the county’s general fund, and replace that with a 1 percent sales tax on everything sold in the county. Commercial and industrial properties would still pay property taxes to the general fund, although at a lower rate.
Property tax bills would be reduced by the 7.32 mills currently dedicated to the general fund, which means a reduction of about $500 a year for the owner of a $200,000 home. It’s estimated that the HOST would collect an estimated $125 million a year.
Commission Chairman Tim Lee said the commissioners probably will decide this summer whether to try and proceed with a HOST. The first step would be to get Cobb’s state legislative delegation to sign off on the idea, then mount a campaign for a countywide referendum, probably in 2016.
“We’re to a point now where I think the time is ripe,” Lee said. “I would say that before we adopt a budget this summer, we’ll have to (decide whether to) pull the trigger on that.”
Commissioner Lisa Cupid said she is concerned that a sales tax hike would hit low-income people the hardest. That’s because with a sales tax a person with a large income pays the same as a low-income person, so it impacts the low-income person more.
“We need more information on that,” said Cupid, who represents the southwestern portion of the county. “It would have a big impact on some of my constituents.”
The idea of a HOST has been discussed for several years, but seems to have taken a more serious turn as county leaders consider a long list of $1.2 billion in capital needs over the next decade.
During a daylong retreat Wednesday, Cobb Finance Director Jim Pehrson told the county’s elected leaders and department heads that the HOST would be a big step toward funding capital needs because up to 20 percent of the tax revenue can be dedicated to that purpose — things such as construction projects and large purchases of vehicles, technology or HVAC systems — while the rest goes to the general fund.
Currently, capital projects are paid for with surplus funds, along with about $10 million from the county’s $320 million general fund.
“We haven’t had a dedicated source for capital projects beyond that,” Pehrson said. “We need a dedicated source.”
Even if a HOST were adopted, Pehrson said the county would still need the Special Purpose Local Option Sales Tax, which is another penny sales tax dedicated to county government. The county also has a penny SPLOST dedicated to the school district.
Lee said he plans on moving forward with a county government SPLOST renewal this fall, despite the current tax not expiring until December 2015.
He said holding the SPLOST referendum during this year’s general election would save the county about $500,000 — the cost of holding a special election next year. But he acknowledged that the county would likely try again and hold a special election anyway should the SPLOST fail at polls this year.
Pehrson told the gathering that there are several issues being decided now that could have a big impact on the county’s ability to fund a capital program for years to come. Those include: the county’s desire to eliminate transfers from the water system to the general fund; its goal of reducing property tax rates to pre-recession levels; expansion of bus service; Cobb’s decision to add 40 police positions; and a pay study that could result in increasing salaries and benefits for county employees.
If all of those things happen and the tax digest remains constant, the county would be looking at a $5 million funding gap in its capital budget in 2015. Under those same conditions, the gap would grow to $32 million by 2024, Pehrson said.
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