Published Sunday, October 05, 2008

Amendment questions on November ballot

By Sarah Fay Campbell

The Times-Herald

Voters will be picking more than politicians when they cast their ballots for the November general election.

There are three state-wide constitutional amendments, and two questions of local importance, on the ballot.

Probably the most well-known ballot question is the one asking Newnan residents if they want to allow alcohol to be sold in restaurants on Sundays.

Only residents who live in the city limits will be allowed to vote on the ballot question. If approved by voters, the Sunday sales will only be for restaurants in the city limits.

Voters in unincorporated Coweta, and Moreland, Turin, and Sharpsburg, will vote on a bond issuance to support the Coweta County Fire Department.

Voters will be asked to approve the issuance of up to $20 million in bonds, which will be paid back over 20 years.

The bonds will pay for a new headquarters, a new fire station in the Bohannon/ Corinth road area, and equipment including two ladder trucks and a new communications system.

The tax millage rate in the new fire district will be set to meet the yearly debt service on the bonds, said Coweta County Administrator Theron Gay.

He anticipates the tax increase to be about half a mill. It would equate to about $20 per year for a $100,000 house, Gay said.

As the county develops, and the property tax digest grows, the millage rate needed to meet the debt service should decrease, Gay said.

If the referendum passes, things would probably move forward fairly quickly, Gay said. The repayment millage will be added when the millage rate is set next summer.

The constitutional amendments deal with special taxation for forest land, allowing school taxes to be used for redevelopment, and the creation of "infrastructure development districts."

The forest protection amendment would allow owners of large tracts of forest land to pay taxes on the property's value as timber property -- not what it could fetch on the open market as a result of surrounding development.

Small landowners already have that option, through the conservation use program. Owners of farm and forest land can have their property valued at its current use, if they agree to not develop the property for a certain number of years.

The amendment would apply to tracts 200 acres and greater. The conservation use program is currently limited to tracts of 2,000 acres or less.

To receive the benefits of the program, the property owner must agree to continue using the property for forest purposes for at least 15 years. Any breach of the covenant before 15 years are up will result in the repayment of any tax savings, and possibly additional penalties.

The purpose of the amendment is to encourage conservation of forest land. By reducing the tax burden on timber property, hopes are that the owners will continue to raise trees on the land instead of selling it for development.

Of course, reducing taxes on one class of property means that the money must be made up on other classes of property.

"Any time you reduce properties, you create a shift in the tax burden," said Gay. "That generally means that somebody has got to make up the difference. And that would be my concern," he said.

The House Resolution that set up the constitutional amendment contains provisions to help local governments that are affected by the change.

If the reduction in tax value for timber property results in a loss of less than 3 percent of the total property tax revenue, the resolution states that the General Assembly shall appropriate money to make up half of the loss. For governing authorities that lose more than 3 percent of revenue, the state will cover half of up to 3 percent, and 100 percent after that.

The second amendment would authorize the use of school taxes to fund "tax allocation districts."

The Georgia Supreme Court struck down the use of school funds for TADs this spring, saying that school tax money can only be used for education purposes.

A TAD is a way to finance redevelopment projects.

Its most well-known use is in the Atlantic Station development in Atlanta.

The court case that struck down TADs was over the Atlanta Beltline project.

Under a TAD, property values are essentially frozen for tax purposes.

Bonds are then issued for the redevelopment of an area. The development, of course, raises the value of the property. Businesses and residents pay taxes based on the fair market value of their homes and businesses in the TAD. But the city, county, and school system only get the taxes they would be owed if the redevelopment had never happened. The rest of the money goes to pay off bonds. After a certain time period, usually 20 years, the TAD expires, and the property taxes start going to the local governments.

The Atlantic Station TAD raised several hundred million dollars. The taxable value of the property in 1999 was $300,000. The current taxable value is $337,740,650. But the city of Atlanta, the Atlanta School System, and Fulton County are only receiving the property taxes they would get if the land was still valued at $300,000. The project, when complete, is slated to contain 5,000 residential units. The school taxes those homeowners pay don't go to fund the schools that their children attend. Instead, they go to pay off the TAD bonds.

The supreme court ruling didn't affect cities and counties that wish to participate in TADs, only school systems. If the amendment passes, school systems will be able to participate.

However, the legislation requires a few steps before the school funds can be used.

The school board must vote to participate in the TAD, and the TAD must be instituted in accordance with a local law. That local law, which can set criteria for TADs, must be approved by voters in a referendum.

The third amendment allows for the creation of infrastructure development districts.

Critics decry the legislation, saying it sets up "private cities."

An IDD can be used by a developer, or a local government.

Essentially, residents in an IDD can be charged a yearly assessment to pay for certain improvements. Those assessments are, essentially, taxes.

Each IDD must have an administrative or governing body.

The local county or city in which the IDD lies must approve it. Additionally, the city or county retains authority and control of its facilities located within the district.

If the amendment passes, the General Assembly will then have to craft a law to govern the IDDs.

The resolution setting up the constitutional amendment says that the general law shall "provide for the powers, duties, and authority of infrastructure development districts and may regulate, restrict, and limit the creation of infrastructure development districts and the exercise of the powers of administrative or governing bodies of infrastructure development districts in any appropriate manner, including, but not limited to, limiting the application of such general law by population."

Gay said he hasn't yet reviewed the IDD legislation in detail. "From my first review of it, it seems like it would certainly be another option to consider," he said. But "I hope people don't think it will be the cure-all for everything."