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Group proposes using SPLOST funds for operating costs
Sales tax currently allowed only for building projects
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The voice of county governments in Georgia is seeking a change in the rules of a 16-year-old sales tax that funds construction projects all over the state.

If Association County Commissioners of Georgia gets its way, instead of solely funding construction, special purpose local option sales tax revenue could be used for maintenance and operation costs of the SPLOST-funded projects.

Currently, the voter-approved 1 percent sales tax can only be used to fund the construction of big-ticket items, such as parks, libraries, roads or sewer lines. Once those projects are built, their operation is largely funded through property taxes and user fees.

The ACCG wants Georgia's law changed in 2012 to allow as much as 15 percent of SPLOST revenue to be used for operating costs.

The flexibility would require a constitutional amendment in Georgia. No state lawmaker has yet signed on to carry the law through the Gold Dome.

ACCG spokeswoman Beth Brown says the change, if approved, would create more flexibility for local governments whose budgets have been hit hard by the recession.

The Hall County Board of Commissioners, in a recent meeting with the local legislative delegation, asked lawmakers to consider the change, too, though county administrator Randy Knighton says there is not a specific Hall County issue connected to the request.

Local governments all over the state have faced a loss in property tax revenue this year, due to declining property values. Sales tax collections used for government operations are also down.

Locally, the changes in revenue resulted in an $11.5 million shortfall for Hall County officials as they prepared the budget for the current fiscal year, which began in July.

The current sales tax, SPLOST VI, is funding the construction of a park in North Hall, the planning of a proposed reservoir, a move to a new administration building and a number of road widening projects.

SPLOST-funded construction on the North Hall park should be complete next spring, but the county, facing a revenue shortfall, has not yet made financial plans to open it.

"The past budget year was extremely challenging," Knighton said. "...In terms of personnel, that is a significant cost of maintaining a project, as well as the overhead cost. All of that is necessary for a capital project to actually function and meet the needs of citizens."

Brown said there are similar situations in counties across the state.

"We're trying to find different ways that we can provide flexibility that these funds could be used at the local level," he said.

As ACCG has proposed the changes, Hall wouldn't be able to reap the benefits until the next round of the tax, which must be approved by voters. ACCG's proposal is for the change to affect future SPLOST referenda. Like other projects the tax funds, operation of both current SPLOST projects and past ones would be a line item on the ballot.

Hall Commission Chairman Tom Oliver said he supports ACCG's efforts to change SPLOST law. He's also optimistic that the bill, if introduced next session, will pass.

"If you're going to do capital, you've obviously got to have some operating expenses on a lot of this stuff," said Hall County Public Works Director Ken Rearden, who oversees Hall's SPLOST-funded construction. "(ACCG's proposal) kind of makes sense to me. If we can get it passed in this legislation, I think it'd be a good thing."

If introduced in the state House of Representatives, the bill would likely face the scrutiny of the Ways and Means committee where state Rep. Chuck Sims, R-Ambrosia, serves as secretary.

Sims said ACCG's efforts at changing SPLOST law aren't new.

He's not confident the lobbying group will be successful in 2012, however.

Sims thinks the provision allowing for special sales tax funds to be used for operation might make the tax less palatable to voters.

But even if legislators see the merit, they might still be hesitant to sign their names to a bill to change SPLOST law in 2012, an election year.

"I don't know who would want to carry that bill," Sims said. "I don't want to... you're in an election year. It's going to be hard to pass a tax bill in an election year."

Rep. Mickey Channell, chairman of ways and means, said he, too, isn't sure the bill will make it anywhere this year.

Though he said he hasn't made up his mind about ACCG's request, he said it warrants a discussion.

Channell, R-Greensboro, said he doesn't think property owners, who by and large fund much of the operation of local governments, should have to shoulder all of the burden of maintenance and operation of sales-tax-funded projects.

"I think there's some merit in at least talking about it," he said. "The alternative, frankly, at the county level is ad valorem tax."