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New legislation allows for 6-year one-cent tax collection

By Michael Davis

From courthouses and park improvements to repaving the street in front of your home and building a new school for your child, sales tax money has been used across the state to fund projects that regular property tax revenue won't cover. And now, new legislation allows local governments to collect that money longer.

A new bill signed by Gov. Sonny Perdue in April extends the time that local governments can collect a one-cent sales tax from five years to six, provided the county has an agreement to share the proceeds with its cities.

But the legislation only applies to sales tax referendums approved after July 1 of this year.

These special purpose local option sales tax (SPLOST) monies are approved by referendum and local officials sing the praises of having the extra cash on hand, in many cases, saving them from the unpopular position of raising property taxes.

But being able to collect that money longer, they say, will be even better.

Henry County is in it's second round of SPLOST collection. The one-cent sale tax was first approved by voters in 1996 and funded projects like the courthouse annex on the Square in downtown McDonough and largely funded the Locust Grove library project, which will be under way soon. Seventy percent of the roughly $140 million officials expect to collect from the tax approved in 2002 will be spent on road improvements.

In Clayton County, a four-year SPLOST approved in 1999 funded the construction of the Clayton Harold R. Banke Justice Center.

But the tax failed the second time it came before Henry voters in 2001. Out-going commission chairman Leland Maddox blames poor decision making and bad management that created a boondoggle of some projects under the first SPLOST (the courthouse annex languished for months without progress) and he fought against the second one.

But it passed in 2002 and is now managed by an arm of the county government. The revenue is flowing so fast, commissioners have even added a standing item to the agenda of all their meetings to address any SPLOST project bids that need to be awarded hastily.

"I think you're going to see more road projects in this county than you've ever seen," Maddox said in an interview last month.

In Clayton County, voters approved a new one-cent sales tax in September and began collecting the tax in January. On the list of projects designated to receive funding are bridge and road improvements, and several parks and recreational facilities. But the tax didn't fly with voters in 2002, said Clayton County's Wade Starr, assistant to the chairman of the board of commissioners.

But six recreational facilities were added to the list of projects on a 2003 referendum and it passed.

"I think the addition of the recreational facilities was instrumental in it passing in September," Starr said.

Henry County SPLOST manager Roy Clack said the longer term allowed for tax collections could mean more projects and a bigger budget with which to complete them.

Henry officials have run into funding problems lately with another courthouse annex to house the solicitor general and all of the lower courts. Court officials say they could've built a building for what was budgeted under SPLOST, but it would've allowed no room to expand.

Henry officials finally opted to fund an extra $2 million out of the county general fund to build it bigger.

By the time Henry is able to collect another round, Clack said, sales tax revenue collected could double. "It would be nice to end this one at the same time we start a new one," he said.

"Instead of $140 million it could be $280 million," he said.

Clack pointed to retail shopping revenue that is expected to flow in as developers plan new shopping centers and a proposed regional mall.

Starr said Clayton's piece of Hartsfield-Jackson Atlanta International Airport allows the county to collect sales tax revenue from people that don't live in Clayton County.

"It's an excellent alternative to raising property taxes and especially, with the airport, it allows people to don't live here to help fund our infrastructure and capital projects," he said.

The new legislation however, does not change the law as it relates to educational SPLOST funds. The state Constitution states that education SPLOSTs can only be collected for a maximum of five years and would require an amendment to change.