1012ELNAMENDAUDListen as Bruce Hallowell, co-founder of the Hall County Taxpayer Association, explains what he feels people need to know about Amendment 2.
Most people have likely put a lot of thought into who they are going to vote for in the presidential race, but many in the community want to remind residents that it’s important to think about what’s at the bottom of the ballot too.
This year, there will be three constitutional amendments to vote on: The Georgia Forest Land Protection Act, tax allocation districts and infrastructure development districts. All three deal with development issues and, as often is typical of proposed amendments, are written in language that makes them difficult for many voters to understand.
"These are all for economic growth," said Michael Paris, the president and CEO of the Council for Quality Growth. "We are urging everyone to vote for all three."
But some, like Bruce Hallowell, co-founder of the Hall County Taxpayer Association, think the amendments will hurt rather than help the state.
Of the three, Amendment 2, which involves tax allocation districts, seems to be drawing the most attention.
Hallowell said he especially has a problem with Amendment 2.
"(Amendment) 2 is the one we need desperately to defeat," Hallowell said.
Tax allocation districts allow local governments to issue bonds to finance infrastructure improvements that they hope will bring new businesses to blighted areas. In turn, the addition of new businesses is expected to expand the tax digest and therefore increase the property tax revenue collected from the area.
The proposed amendment follows a ruling in February by the Georgia Supreme Court that school tax revenue cannot be used to finance redevelopment through TADs. Amendment 2 would authorize schools boards to opt into tax allocation
districts. Though school boards across the state already had been agreeing to do so in previous TADs, even three planned for areas in Hall County, the Supreme Court ruled that they didn’t have the authority to do so.
"That basically cut the benefit in half. ... It greatly reduced the utility of this tool," said Sharon Gay of the law firm McKenna Long & Aldridge LLP.
Hallowell thinks there are a number of factors involved in the amendment that would make it less beneficial than many think.
"The life of the bonds they would sell for the tax allocation districts is 25 to 30 years," Hallowell said. "That would mean that the school district would not receive 1 cent of the increased tax revenue until the bonds were satisfied. And all the risk that goes along with it, they get no return for 25 to 30 years."
But Gay said Amendment 2 would only legalize what has been practiced in Georgia for years. She spoke Friday morning at an event sponsored by the Council for Quality Growth and the Greater Hall Chamber of Commerce.
"I’m here to talk about getting back something we had for 23 years," Gay said.
Gay said TADs have successfully revived areas across the state to bring in businesses, create jobs and increase property values. Not only do property values rise within the TAD, but in the surrounding areas, she said.
"What we’ve found over and over again is that property values outside the tax allocation district begin to rise as well, once you take away that blighted condition," Gay said.
And though higher property values are good, Hallowell said because of the time frame of the bonds used in TADs, benefits cannot be reaped for 25 to 30 years, and tax rates cannot be changed until then. Hallowell also said he believes that having fixed tax rates, as mandated by law in a tax allocation district, could hurt homeowners if the economy goes sour and home values plummet, like in the current economic situation.
"Once you go into a tax allocation district, the tax rates are fixed," Hallowell said. "By law, they cannot lower the taxes. So here (homeowners) are holding the bag, instead of having a $300,000 house, we now have a $150,000 house, but we’re paying taxes on a $300,000 house."
If passed, the amendment would put Georgia in line with laws in other states and would give school boards the opportunity to negotiate with developers for new schools or other benefits as part of opting into the TAD, Gay said.
Hall County school system Superintendent Will Schofield has said the tax allocation districts can be a great economic tool for schools, but should be considered carefully.
Amendment 3 would create infrastructure development districts, which are also economic tools similar to tax allocation districts.
"If you’re for one, you really ought to be for the other," Gay said.
An infrastructure development district allows local government to pay for the construction and maintenance of new roads, sewers, schools or other infrastructure through bonds and private companies.
The main difference is that TADs apply to areas in need of redevelopment, while infrastructure development districts are beneficial for land that has never been developed.
"This allows for the growth to pay for itself," said Heath Garrett of Georgians for Quality Economic Development.
The Georgia Forest Land Protection Act would be authorized by passage of Amendment 1.
"The message of Amendment 1 is really very simple," said Steve McWilliams of the Georgia Forestry Association. "It is to make sure that as Georgia continues to grow and develop, as our as our population increases by a third, by I think 2025 is the prediction, that we continue to be a green state and that we continue to protect the forests in the state that provide so many benefits."
The purpose of Amendment 1 is to provide an incentive to for land owners to keep their property forested. The act would give tax credits for people who own 200 acres or more of forest property and choose not to develop the forest land for at least 15 years.
"Particularly in the last five to seven years, property values have increased around the state so dramatically. Many, many owners of large forest land, private land owners, are being faced with the situation where they’re not really deriving enough income off the property to pay property taxes," McWilliams said.
The state would reimburse local governments for the property tax revenue they lose from the lower tax.