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Our Views: Taxing patience
Undermining public trust in SPLOST could endanger future funding options
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Members of The Times editorial board include Publisher Dennis L. Stockton; General Manager Norman Baggs; Executive Editor Mitch Clarke; and Managing Editor Keith Albertson

Since 1985, Special Purpose Local Option Sales Taxes have provided Georgia communities with a viable option for financing infrastructure and major capital projects. Throughout the state, cities and counties have used SPLOST collections to build courthouses, jails, libraries, roads, parks and other specific projects that could be clearly defined for voter approval.

Originally limited to county governments, SPLOST as a means of financing was extended to Georgia’s schools in 1997. Under voter approved E-SPLOST programs, all manner of school facilities have been constructed throughout the state.

SPLOST as a funding mechanism has proven to be extremely successful and popular. Time and again, voters have cast their ballots in favor of using sales tax revenues to provide financing for specifically identified needs in counties statewide.

SPLOST works for cities, counties and schools. Each specific SPLOST program is for a set number of years, and voter approval has to be won for each new sales tax program. Specific projects have to be identified for funding before a referendum can take place. The end result is projects are undertaken that are important to voters, and some of the burden of financing is lifted from property taxpayers, who otherwise would have to shoulder the full load.

SPLOST approval is never a given in any community, and there have been some proposals defeated by the voters. But more often than not, voters have shown their support for sales tax funding statewide.

We have to wonder, though, if the future will be as promising for SPLOSTs as it has been in the past. As the state’s economy weakened in recent years, governments at every level felt the pinch in reduced revenues from all form of taxes, and as a result have taken actions that could have negative impact on future SPLOST programs.

Last year, for example, the state proposed expanding the basic SPLOST concept to a regional revenue collection plan to finance road projects on a multicounty basis. The result was the ill-fated T-SPLOST, which voters turned down overwhelmingly in most regions of the state, including here in Northeast Georgia.

Many of those who cast a ballot against the T-SPLOST were voting against such a tax for the first time. The T-SPLOST was too complex, too different, and at the bottom line voters just didn’t trust the program to work.

A lack of trust will destroy SPLOST at any level. If voters don’t have faith its projects have been properly identified, or that sales tax revenues will be properly spent, they will not continue to vote in favor of future SPLOSTs.

The T-SPLOST isn’t the only problem, however. We need look no further than here in Hall County to see the sort of SPLOST issues that will undermine the program’s credibility.

Two years ago, Clermont filed suit against Hall County over decisions related to SPLOST funding for a library. Then last week, Gainesville filed suit against the county over disbursement of sales tax collections.

And it isn’t just here. Other counties are seeing challenges to how money is spent after a SPLOST is approved, or encountering feuds between cities and counties over approval of distribution formulas.

Every time a SPLOST issue is questioned, voter support erodes. T-SPLOST proved that voters will not support what they do not trust, and if trust in SPLOST is lost at the local level, voters’ support is going to be lost as well.

The problem with depending on sales taxes for financing is that no one can precisely predict how much money will be raised over a certain period of time. Thus, it is impossible to make exact funding commitments to certain projects, or in dividing the collected dollars among various governments. When people spend less, less money is collected, and there is less to disburse, which is at the heart of the Gainesville litigation against the county.

City officials believe that an intergovernmental agreement between the entities guaranteed them a certain amount of money over a set period of time. County officials believe the city has received all the money it is due. We’ll leave it to the courts to decide the issue, though we must point out that when taxpayers are paying the legal fees on both sides, it is unfortunate such problems cannot be resolved outside of the courtroom.

The current litigation should also provide a cautionary warning to any government entities considering agreements that would allow accelerated payments of SPLOST collections from one government to another. When you can’t be sure how much money will be collected, it’s hard to predict what you safely can distribute in advance.

But the issue here isn’t Gainesville’s current litigation, the previous lawsuit by Clermont, T-SPLOST, nor the feuding over SPLOST that has popped up in counties across the state. The concern is that every time voters hear of SPLOST problems, their confidence in a financing vehicle that has proven invaluable for a quarter-century is lessened.

For those of us who can remember what government financing of infrastructure, capital needs and schools was like before SPLOST was an option, the thought of voters turning their back on future sales tax programs is a scary one.

This goose truly does lay golden eggs for counties and school systems across the state. Our elected and appointed officials need to nurture it by inspiring voter confidence, not kill it with a loss of public trust.

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