The 8 percent sales tax on cups of coffee, haircuts, lumber and most other things sold in Atlanta ranks among the highest sales tax rates in Georgia. It is a combination of state tax and a variety of 1 percent “penny” taxes imposed by local jurisdictions.
Atlanta voters will get to decide on the fate of one such penny Tuesday, when they will either reauthorize or strike down a 1 percent municipal option sales tax, or MOST, that funds water and sewer projects in Atlanta. If renewed for another four-year term and again in 2016, the tax could raise $750 million.
Michael Julian Bond, an at-large Atlanta city councilman, said he believes the tax will pass, but he added that sales tax rates are too high. “There needs to be a reining-in of these pennies,” he said.
Here is an accounting for the “pennies” that are collected in Atlanta:
Atlanta Public Schools — 1 percent. The special purpose local option sales tax, commonly called the E-SPLOST, was initially enacted in 1997. APS says the tax, with several renewals, has generated $1.4 billion for projects, including 18 new school buildings and 71 renovations and expansions of existing facilities. The money also is used to upgrade heating and air conditioning, surveillance equipment and bus fleets.
MARTA — 1 percent. MARTA’s budget is partially funded by a 1 percent sales tax in DeKalb and Fulton counties. For fiscal 2012, the transit agency budgeted about $340 million in sales tax revenue. In 2000, the sales tax helped pay for the North Springs and Sandy Springs MARTA stops, the last stations to open.
Fulton County — 1 percent. One penny tax collected inside Atlanta is shared with Fulton County. About 43 percent of the money goes to Atlanta, City Councilwoman Yolanda Adrean said. Atlanta hopes to renegotiate its share this summer based on considerations such as population shifts and sales tax volume. Those negotiations could yield $9 million more in revenue per year, she said.
State sales tax — 4 percent. In 1989, Georgia lawmakers increased the state sales tax from 3 percent to 4 percent, expecting the tax to raise at least $507 million a year, according to an Aug. 22 story in The Atlanta Journal-Constitution. Sales tax revenue declined slightly for two years in the early 1990s but has grown steadily in the following years. Some goods, such as groceries, are exempt.
Municipal Option Sales Tax — 1 percent. Between 2004 and 2010, the tax raised more than $700 million for water and sewer projects, some of which were required by federal regulators after decades of neglect. The MOST has helped pay for the Nancy Creek Tunnel — a huge storage tunnel that reduced sewage spills in North Atlanta — and construction of the Custer Avenue Sewage Storage Facility. The West Area Tunnel stores 177 million gallons of combined sewage in a storm, and the South River Tunnel increases capacity and reduces sewage spills in Southeast Atlanta, according to the city. Money raised through the MOST also goes to repair and replace leaking water mains.
T-SPLOST — 1 percent (proposed). Voters will decide on yet another penny sales tax — this one to fund transportation projects — on July 31.
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