North Georgia voters consider tax measures for infrastructure projects

In addition to the City Schools of Decatur bond referendum on Nov. 3, 2015, several other North Georgia jurisdictions are considering infrastructure projects that could affect property taxes or sales taxes.

Like Decatur, Pike County will have a school bond referendum.

Hall County and Baldwin County school boards are proposing special purpose local option sales taxes for education. Augusta is considering a seventh renewal of its special purpose local option sales tax. If the SPLOST is renewed, Augusta's sales tax will stay at 8 percent rather than falling to 7 percent.  Putnam County is also considering a SPLOST.

Clean sweep for sales tax proponents

Local option sales taxes were extended or renewed in four North Georgia counties in yesterday’s election. Majorities of over 80 percent supported 1-percent sales taxes for education in Dawson and White County. Over 60 percent of voters supported penny sales taxes for public safety and infrastructure improvements in Hall and Whitfield County. A bond proposal in the City of Atlanta also passed with 88 percent voting yes.

North Georgia counties vote on sales taxes

Today was election day in Dawson, Hall, and Whitfield County.  Voters there considered local option sales tax proposals.  11 Alive has a summary of the ballot measures:

Dawson County: ELOST
The 1% local option sales tax would raise $36.5 million for the Dawson County School District. They'd use the money to renovate old schools, buy buses, and build a performing arts center for Dawson County High School.

Hall County: SPLOST
The 1% SPLOST would last 5 years and raise $158 million to cover a long list of county projects including acquiring ambulances, upgrading the 911 system, renovating the library, expanding the landfill, and buying public safety vehicles.

Whitfield County: SPLOST
The 1% SPLOST would last four years and raise $63.6 million. The money would purchase fire-fighting turnout gear, breathing equipment, fire trucks, and patrol vehicles. It also includes money for building out the library, storm water system, and Tunnel Hill Depot restoration.

The City of Atlanta also had a bond referendum today, but it would not affect Atlanta's sales tax rate at this time.  Only 5 percent of Atlanta's precincts have reported results at the time of this posting.

HB 215 approved by committee

Georgia House Bill 215, which would change sales tax rates and distributions in DeKalb County, has been approved by the House Ways & Means Committee. Next it will be considered by the House Rules committee which will probably schedule the bill for a floor vote. The bill would:

• Provide for a vote on whether to replace the existing HOST with a new “equalized HOST.” 
• In addition to the equalized HOST, an additional 1 percent county special purpose local option sales tax (SPLOST) would be put before voters countywide. 
• Both ballot questions would have to be approved in order for either to go into effect. 

The existing HOST credit saves homeowners a several hundred dollars a year depending on their property value and tax district. For example, a resident with a $200,000 home in unincorporated DeKalb saved about $790 on their county property taxes in 2014 because of HOST. A resident with a $200,000 home within Decatur’s city limits would have saved about $390 on their county property tax bill in 2014 because of HOST. The HOST tax credit does not alter municipal tax bills.

HB 215 stipulates that proceeds from the equalized HOST would continue benefiting all DeKalb County property taxpayers, whether their property is in unincorporated DeKalb or in DeKalb’s cities. The amount of HOST credit should increase somewhat under this proposal because all of the equalized HOST would go toward property tax relief rather than a portion of it going toward infrastructure improvements as the current formula dictates. Revenues from the new SPLOST would be disbursed per existing state law in accordance with intergovernmental agreements between DeKalb and cities.

From a high-level tax standpoint, what the proposal would do is essentially to take some of the local tax burden off of residential property taxpayers and shift it slightly toward sales taxpayers. However, DeKalb cities would still have the discretion to adjust their own millage rates to offset foregone HOST revenue under the old formula.

Tax recap from Election Day

Voters in several North Georgia cities and counties cast ballots on a host of tax measures in last Tuesday’s elections.

A 54-46 majority of voters in Cobb County, a traditionally low-tax county, authorized a $68 million bond that could raise Cobb’s property tax millage rate by 2 mills, which would increase taxes there by $200 annually per $100,000 in assessed value.

Also in the metro-area, majorities in Gwinnett County (58-41) and Henry County (54-46) approved renewals of 1 percent special local option sales taxes (SPLOST), and Rockdale County voters passed a 1-cent sales tax for education. 

Elsewhere in North Georgia, majorities in Lumpkin (70-30), Walker (68-32), Carroll, Gilmer, Haralson, Madison, and Union County also approved SPLOSTs.

Anti-tax sentiment was more pronounced in Habersham County, where SPLOST renewal was defeated 54-46, and in Fayette County where a SPLOST for stormwater drainage projects was defeated 57-43.  A SPLOST in Floyd County barely passed.

Voters in the City of Clarkesville in Habersham County passed tax relief for businesses by approving Freeport exemptions on business inventories.

The City of Decatur and DeKalb County had no proposed tax changes on the ballot.

 

Good explanation of HOST

Even for a tax collector like me, the Homestead Option Sales Tax (HOST) can be tricky to understand, much less explain to the public. That’s why I was impressed by this straightforward, recent explanation of the SPLOST, LOST, ELOST and HOST by state Sen. Bill Heath, with a little of my own commentary in italics mixed in:

In addition to Georgia's state sales tax rate of 4%, there are four different types of local-option sales and use taxes that may be levied by local governments. They are most commonly known by their acronyms-SPLOST, LOST, ELOST and HOST. In addition to showing up on your sales receipts, you've likely also seen one of them show up on your ballot as a voter referendum.

Note: DeKalb County has the ELOST, HOST, and MARTA sales taxes. Last year the DeKalb County Board of Commissioners considered replacing the MARTA tax with a SPLOST.

A Special Purpose Local Option Sales Tax (SPLOST) is normally a one percent county sales and use tax that is enacted by the direct vote of the constituents. Used to fund specific capital outlay projects, a SPLOST is first initiated by a county government for approval by the voters. To increase accountability, this voter referendum must state the purpose of the tax, the length of time it will be imposed and the amount of revenue it will raise. This method of enacting a SPLOST is a sure way for constituents to have a direct voice over projects and the money they give to the local or state government...

Another type of local sales and use tax is the Local Option Sales Tax (LOST). A LOST also requires voter approval, but rather than being devoted to a specific project like a SPLOST, a LOST is intended to be used as replacement revenue for the local property tax. Revenues from this tax must go to reducing the millage rate and that reduction must be reflected in local property tax bills. 154 of Georgia's 159 counties utilize a LOST. The total revenue from this type of local sales and use tax topped $1.3 billion in 2009.

An Education Local Options Sales Tax (ELOST) allows county schools to propose their own capital improvement programs to voters. Unlike the SPLOST, the revenues from this optional 1% sales tax are not distributed to the county government but are instead levied by boards of education and must used for capital projects for educational purposes or may contribute to the retirement of the system's existing general obligation debt. Excess proceeds from an ELOST must be used to retire school-system debt, or if there is none, to roll back the millage rate. The total revenue from this type of local sales and use tax topped $1.3 billion in 2009.

The majority of Georgia counties have a 7 percent sales tax, that is, the 4 percent state sales tax plus a LOST, SPLOST, and ELOST. DeKalb is somewhat unusual in this regard by neither having a LOST (like Fulton County) nor a SPLOST (like Cobb or Gwinnett County). And DeKalb is distinctive in another way…

The final type of local sales and use tax is the lesser-known Homestead Option Sales Tax (HOST) which may be collected by counties that do not levy a LOST. A HOST is a sales and use tax option that must devote at least 80 percent of its proceeds to provide for an increased homestead exemption from county ad valorem taxes. The remaining 20 percent may be used for capital outlay projects and excess revenues must be used to adjust the millage rate. Only DeKalb and Rockdale counties currently utilize a HOST.

There’s a little more to read from Sen. Heath at this link, but it’s mostly about his home district which is on the other side of Atlanta.

Different counties, different sales tax rates

The Atlanta Journal-Constitution ran a lengthy piece on sales tax collections yesterday. They concluded with this handy rundown on sales tax rates in the metro Atlanta area and what they’re based on:

Paying the pennies

Here are the 1-cent state and local sales taxes charged in five metro Atlanta counties, plus Atlanta. Everyone pays 4 percent to the state, and local governments may add sales taxes of their own. A LOST is a local-option sales tax, and a SPLOST is a special local-option sales tax, which may be used for specific purposes such as building schools or roads. SPLOSTs may end or be replaced by other SPLOSTs, so these figures may change over time. Bear in mind that each county or city tax will go up another penny if voters approve the transportation tax in 2012.

Atlanta — 8 percent

4 percent local (the same three taxes as DeKalb or Fulton, plus a 1 percent sewer tax) and 4 percent state

Sales tax on $50 pair of shoes: $4

DeKalb County – 7 percent

3 percent local (education tax, a homestead tax and MARTA) and 4 percent state

Total sales tax on $50 pair of shoes: $3.50

Fulton County – 7 percent

3 percent local (education tax, LOST and MARTA) and 4 percent state

Total sales tax on $50 pair of shoes: $3.50

Clayton County – 7 percent

3 percent local (education tax, SPLOST and LOST) and 4 percent state

Total sales tax on a $50 pair of shoes: $3.50

Cobb County – 6 percent

2 percent local (education tax and SPLOST) and 4 percent state

Total sales tax on $50 pair of shoes: $3

Gwinnett County – 6 percent

2 percent local (education tax and SPLOST) and 4 percent state

Total sales tax on $50 pair of shoes: $3