If Atlanta leaders get their way, the city's one percent sales tax to fund water and sewer projects is going to be with us for a while.
The year 2020, to be exact. And with Atlanta seeking a 13-year extension on federally-mandated projects that are supposed to be finished by 2014, the work could run more than a decade longer than expected.
Atlanta residents will vote March 6 on a whether the municipal option sales tax, or MOST, should be renewed for another four years. The penny tax raised more than $700 million between 2004 and 2010.
The tax could raise up to $750 million over eight years if is renewed this year and again in 2016. That's when the city's authorization to ask for a tax extension runs out.
"People ask me, ‘Are you going to finally tell me that this is enough -- that this is all we have to do -- or are you going to keep asking?'" said Jo Ann Macrina, Atlanta's watershed commissioner. "I get that question often. I try to explain to people it's just like everything else: maintaining your house, maintaining your car. People are always flushing their toilets."
The sewer tax is an oddity in today's political scene: a tax that lacks organized opposition. Even leaders of the usually tax-averse Fulton County Taxpayers Foundation and Fulton County Republican Party told The Atlanta Journal-Constitution that the tax may be necessary.
The tax helps Atlanta and its watershed department comply with federal mandates to overhaul its sewer system and stop pollution in the Chattahoochee and South rivers.
The watershed department is relying on the sewer tax for about $113 million this year, or about 20 percent of its $568 million operating budget. Most of the department's money comes from water and sewer fees.
Atlanta Mayor Kasim Reed said the tax would "protect Atlanta's water and our wallets."
"Voting ‘yes' won’t increase your sales tax at all," he said in a public service announcement. "Continuing the MOST means commuters and visitors to our city…pick up some of the cost and pay their fair share."
Atlanta’s 8 percent combined sales tax rates is among the highest in Georgia.
Atlanta's combined water and sewer rates -- already the highest in the nation, according to studies commissioned by the city -- could jump as much as 30 percent if the tax doesn't pass, officials say. But the city plans no rate increases for city water and sewer customers over the next four years if the tax is renewed.
"Atlanta has done a great job to date and needs this tool to finish the work," said Sally Bethea, executive director of the Upper Chattahoochee Riverkeeper, whose lawsuit against the city in the mid-1990s over sewer spills resulted in the federally mandated fixes.
Some, but not all of the $440 million expected to be raised over the next four years will go toward work required by federal regulators to sharply reduce sewer overflows in Atlanta. The city is trying to clean its sewers, remove blockages, fix leaks and defects and increase capacity.
"We're still continually catching up" to necessary repairs and upgrades, said Macrina, whose department is responsible for maintaining and upgrading Atlanta's 1,600 miles of sewer pipes.
Atlanta's watershed department took out about $2 billion in debt to fund required sewer projects. Overall, the cost of its water and sewer upgrades -- some of them voluntary rather than required -- runs to $4 billion.
Atlanta finished its mandated work on its "combined sewer system" -- in which stormwater and sewage can flow together -- in 2008, spending about $711 million in the process.
The city has spent more than $900 million, or about 65 percent of the budgeted total, in a separate project involving its "sanitary sewers." That system is designed to only carry sewage. That $1.38 billion improvement program has a targeted completion date of 2014 unless the city is granted an extension, which the city says would ease the financial burden on its residents.
The federal government is expected to issue a decision on Atlanta's extension request early this month.
The city says it has already made significant progress. Between 2004 and 2011, the number and volume of sewer overflows dropped by 62 percent and 97 percent, respectively. Atlanta has completed massive projects such as tunnels and pump stations at Nancy Creek and the South River.
Sam Williams, president of the Metro Atlanta Chamber, said discussions with local businesses about the tax renewal vote have been simple.
"I think the question is, do you want to see an increase of 30 percent in your water and sewer bills?" said Williams, whose group is supporting a pro-sewer tax campaign called Citizens for Clean Water 2012. "There's a pain to doing nothing -- a monetary pain."
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The issue:
Atlanta officials say the one percent municipal option sales tax, or MOST, keeps Atlanta's high sewer rates from going even higher as the city tries to pay for upgrades required by regulators. Atlanta voters have already approved the tax twice. About 75 percent of voters backed it in 2004, and 71 percent supported it in 2008.
In the 2012 fiscal year under June 30, the tax is anticipated to provide about a fifth of the watershed department's budget.
Sources of revenue for Atlanta's Department of Watershed Management:
Water and sewer rates: $415.3 million (73 percent)
MOST receipts: $113.1 million (20 percent)
Miscellaneous items, including interest earnings: $39.5 million (7 percent)
Spending by Atlanta's Department of Watershed Management:
Debt service: $245.4 million (43.2 percent)
Operations and maintenance: $210.7 million (37.1 percent)
Other/reserves (including pension obligations): $111.8 million (19.7 percent)
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