Voters to decide if school taxes can be used for non-education projects

By SARAH FAY CAMPBELL sarah@newnan.com The second statewide amendment on the Nov. 4 ballot would allow future school tax dollars to be used to fund redevelopment projects. Approval of this amendment would allow school systems to give up future tax revenues in a particular area, and have those dollars used instead to pay off bonds used for redevelopment in that area.
The amendment was designed to negate a 2008 Georgia Supreme Court ruling that found that Tax Allocation Districts were unconstitutional because they used educational funds for purposes other than education. Currently, the Georgia Constitution states that "school tax funds shall be expended only for the support and maintenance of public schools, public vocational-technical schools, public education, and activities necessary or incidental thereto, including school lunch purposes." The constitutional amendment will allow TADs to be used again. Each taxing authority will get to decide whether it wants to participate or not. A Tax Allocation District is a form of funding for development projects. Its most well-known use was in funding the Atlantic Station property. The Camp Creek Marketplace was also funded by a TAD. In a TAD, property values in an area to be redeveloped are essentially frozen for tax purposes. When the property values inside the TAD rise, because of the redevelopment project, the increased tax money that would normally go to the local government and school board is instead used to pay off bonds that funded some or all of the project. All of the property taxes paid by the various property owners in Atlanta Station, for instance, basically go to pay off the loans that funded a substantial part of the project. All the county, city, and school board receive are the taxes that would be owed if the property were still the contaminated site of a closed steel mill, instead of a project slated to contain 5,000 residential units, six million square feet of office space, two million square feet of retail, and 1,000 hotel rooms. TADs can be used to encourage private developers to invest in troublesome properties -- properties that may not be developed otherwise. But TADS have become increasingly popular in the last few years, and critics say that they are being used for projects that private developers would have funded anyway. Additionally, many of the projects have a residential portion -- which means they will also have school children. School systems see increased enrollment, but don't receive the tax money paid on those children's homes. Since 1999, the value of property in the Atlantic Station TAD has risen from $300,000 to $337,740,650. The Atlanta Development Authority issued its second round of TAD bonds for Atlantic Station in 2006. The total was $166,515,000. All TADs have a time limit. The Atlantic Station TAD will last 25 years. The law suit that struck down TADs was filed over the Atlanta Beltline project. The Georgia Supreme Court ruled that the Atlanta School System can't use its future tax money to pay for the Beltline project. The city of Atlanta and Fulton County can still give up a projected $800 million over the next 25 years. The school system taxes were expected to total $850 million over 25 years. TAD funds can be used for infrastructure as well as to help defray costs for developers. Passage of the referendum is only the first step in creating a new TAD. Existing TADs were not affected by the court ruling. If it passes, the Georgia General Assembly will have to pass "enabling legislation" that creates the law regulating the TADs. Additionally, the law states that the TAD must be in accordance with a local law, which must be approved in a referendum. The local law can set criteria for when and where TADs can be used. When asked about the amendment, Coweta School Supertintendent Blake Bass said, "Until the state fully funds education and until the austerity cuts and budget cuts end, I don't know that I could recommend that the board use that authority to spend educational dollars for anything other thaneducation. However, I think it's good that they would probably have that option." The legislation creating the referendum, Senate Resolution 996, can be viewed at www.legis.state.ga.us .

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