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Gainesville school officials still weighing TAD participation

POSTED: March 30, 2009 11:40 p.m.

Despite talking about it for two hours, government and school officials have yet to decide whether the Gainesville school system will help fund redevelopment in Midtown.

Monday’s meeting, the first for Gainesville’s Tax Allocation District Advisory Committee, was to be an informational session about funding redevelopment projects in the blighted 270-acre district. But at the meeting’s start, the three committee members representing the Gainesville school system announced they had no intentions of providing property taxes for the district.

School taxes would be about 60 percent of TAD funding, and that loss would be a significant blow to the city’s efforts.

School officials, who last week backed out of a December 2006 agreement to fund the district, said Monday their participation was only as a courtesy.

City officials stressed the benefits of the school system’s participation, and tried to soothe the school board’s concerns over forgoing tax money the system needs today to reap benefits that may be years away.

"I wish we could actually see how, in the long term, every single one of us would benefit (from funding the district). Every single child who goes to Gainesville city would benefit. Everybody who lives in Hall County would benefit. Everybody who lives in Gainesville would benefit," Mayor Myrtle Figueras said.

Gainesville schools Superintendent Merrianne Dyer said although the school board decided Friday that it would back out of a 2006 agreement to fund the district, she would bring the issue before the board again.

Under their 2006 agreement, city and county governments and the school system still would get property tax revenue from the 270-acre district, but revenues above the Dec. 31, 2006, taxable value would fund redevelopment projects in the area. Redevelopment usually increases property values and therefore tax revenues.

But since 2006, the legality of tax allocation districts has been called into question. The state Supreme Court ruled in February 2008 that using school taxes — in most cases, a big percentage of TAD funding has come from school taxes — for anything other than education was unconstitutional. In November, Georgia voters approved a constitutional amendment allowing schools to fund the districts at their discretion.

State legislators currently are working on ratifying the amendment; the House unanimously approved it earlier this month, and the Senate is expected to take the issue to vote Wednesday.

Gainesville school officials have questioned whether their 2006 agreement with the city is legal since it was signed before the constitutional amendment, but the legislation provides that all previous agreements are legal.

Gainesville school board Chairman David Syfan said even if state legislators ratify the referendum this week, the board already has pulled out of the tax district agreement.

"There’s nothing to ratify," he said.

Syfan also questioned whether Midtown redevelopment would bring more students into the city. The school system could not afford to educate more students from the district if it could not receive all the district’s property tax revenue, he said.

"If our TAD development project is 1,200 homes and we put in a new sewer line, then we’re pledging for 25 years, or however many years, that incremental value for those 1,200 homes and those 1,200 homes could have 1,200 school children that, for 25 years, we would not get the incremental (tax) value to pay to educate those children," Syfan said.

Residential development is not in the plan for Midtown, and the money cannot be used for water and sewer projects, according to Gainesville’s Planning Director Rusty Ligon. Those points were stressed during Monday’s meeting by City Manager Kip Padgett.

TAD Advisory Committee Chairman Tim Evans offered to add language in a future agreement with the school system to assure that any redevelopment efforts would not burden the schools.

At the end of the meeting, Dyer told city officials she would bring the issue before the board again at its April 15 meeting.

"At this point, our role in this really has got to come from our board," Dyer said. "The only thing I can say is ‘let’s look at all angles, all sides of it.’ "

Figueras asked that school officials educate themselves about TADs before making any decisions.

"Think about what it does for us as a community, rather than saying ‘I’ve got to pay you my money.’ Nobody’s paying any money unless we get new development," Figueras said. "If we get no new development then we’ll stay in the ugly with each other."



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