When Barrow County residents voted for a $5 million cultural arts center on a 2005 SPLOST project list, times were good and expectations for a state-of-the-art facility to transform the area were high.
Fast-forward a few years into a record recession and the project is on hold. Private investors hurt by the economic downturn have not been able to contribute money originally slated for the arts center, and the county estimates the costs could be closer to $13 million to $15 million, additional funds Barrow can’t afford, Barrow Commission Chairman Daniel Yearwood said.
New legislation passed by state lawmakers this year, and signed by the governor earlier this month, would allow Barrow and other counties to ask their residents to abandon projects approved for special purpose local option sales tax funding that officials deem unfeasible.
“I think residents would forgo the project instead of paying another $13 million or so in debt service. We didn’t appropriate that much money,” Yearwood said. “Our county revenues have gone from $37.5 million to $29 million this year, and we can’t put up that much additional money right now.”
If residents voted, through a referendum to cancel the projects, the money could be used to pay down existing debt or roll back property taxes. Sales taxes would still be collected over the course of the SPLOST period but would not go toward the canceled projects.
The law does not pertain to education SPLOSTs.
Declaring Barrow’s cultural arts center project unfeasible is up for discussion.
“During the good times when the money was coming in, sales taxes were up and a lot of counties were able to do projects that may have made sense, but right now they may not,” said Clint Mueller, legislative director for the Association County Commissioners of Georgia, which pushed for the legislation. “The taxes have already been paid for the projects, but if they are not going to be constructed, there needs to be a way to get the money back into the hands of taxpayers. I don’t think anyone wants the money sitting there indefinitely.”
To ward against spending more taxpayer money on a special election to cancel the projects, the law requires local governments to place the question on the ballot of the next scheduled SPLOST election.
In counties like Cobb, where residents just approved a $492 million four-year SPLOST extension in March, a referendum on unfeasible projects will have to wait.
Still, county officials are keeping track of projects from a 2005 SPLOST that have been deferred, mainly road projects including intersection improvements along Bells Ferry Road, widening South Cobb Drive and Powder Springs Road, and installing sidewalks along Atlanta, Cooper Lake and Floyd roads.
“These are projects that are currently not feasible due to a variety of factors,” said Alice Summerour, chairwoman of Cobb’s 2005 SPLOST oversight committee and a supporter of the new unfeasible project law. “The main factor being the downturn in the economy has significantly reduced the amount of money we have actually collected during this SPLOST.”
The legislation is a benefit for taxpayers because of the property tax relief it offers, said Lance Lamberton, president of the Cobb Taxpayers Association.
“This would be a means where you wouldn’t have to make cuts or raise taxes,” he said.
Had the law been in place sooner, Athens-Clarke County could have abandoned a $4.7 million upgrade to a commercial air terminal it included in a six-year 2005 SPLOST.
“During that period, commercial air travel at airports our size changed dramatically due to federal funding and other issues,” said Alan Reddish, manager of the unified city-county government. “The question became how do we best appropriate our funds. The new law would clarify that, and we are supportive of that for sure.”
For Athens-Clarke County, where the next SPLOST collection will last at least nine years, the law is sound policy, Reddish said.
“When you make a decision about a project that far in advance, the attributes could change,” he said. “Every government needs to be able to re-evaluate its ability to provide the operating costs for these projects that may have changed due to economic conditions.”
Despite the touted benefits for taxpayers, the Georgia School Boards Association had the education SPLOST projects removed from the legislation. None of the association’s member school districts wanted it, and the association was concerned about unintended consequences, said Angela Palm, the association’s policy and legislative services director.
“The legislation is aimed at something inconceivable, but it could also lead to voters saying ‘Why didn’t you think of that?’” Palm said.
And with the largest portion of property taxes going to schools in most jurisdictions, the law could lead to public pressure to abandon a project in order to roll back property taxes, Palm said.
“That may be far-fetched,” she said, “but we did look at that as an unintended consequence.”
James Bell, president of the Georgia Taxpayers Alliance, agreed.
“My concern is that there is already enough wiggle room in the law and the law should be restricted, not expanded,” he said, adding that local officials do a disservice to residents when they offer extensive SPLOST projects that become unaffordable when tax revenue drops. “And they can say we can increase your property taxes to pay for it unless you abandon the project.”
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