JONESBORO — Clayton County officials are sorting out what to do next in the wake of the state Senate’s decision to pass legislation that bars the county from collecting property taxes on leases at Hartsfield-Jackson Atlanta International Airport.
With this week’s passage of House Bill 399, Gov. Nathan Deal is the county’s only remaining hope for the legislation’s defeat. It has been sent to his office for consideration and he can either sign it into law or veto it. If it becomes law, the county would be barred from assessing property taxes on leases concessionaires hold at the airport.
A year ago, officials said the annual financial impact on the county’s tax base could be as much as $12.6 million. However, by the end of last spring, they started to back off that number and said they were trying to calculate the true impact.
Since property taxes can change from year to year, Clayton County Tax Commissioner Terry Baskin said the county is still trying to get a grasp on what kind of a tax hit it will be taking.
“At this time, we’re still working out the logistics of House Bill 399,” Baskin said. “I will be meeting with (interim county attorney) Jack Hancock and (tax assessor) Rodney McDaniel on Monday to see where we go from here.”
The legislation could have far-reaching impacts if Deal signs it into law. Not only would county government be affected, but Clayton County Public Schools would have to make financial adjustments as well. The Senate’s passage comes at a time when the district is usually deep in budget planning for the next fiscal year.
Last year, school system officials pegged the estimated impact at around $9 million, but that could change based on what tax officials determine the financial impact to be. School system spokeswoman Vicki Gavalas said district officials are
simultaneously working on their own full assessment of the impact of the bill’s passage.
“We’re in the process of analyzing that now,” she said.
One area where county officials don’t expect to see an impact is the negotiating table. The bill’s passage will not stop county leaders from negotiating a revenue distribution deal with their counterparts in the city of Atlanta, said Board of Commissioners Chairman Jeff Turner.
The passage was not the result county officials had hoped for, but Turner said they entered negotiations with Atlanta last year to address revenue issues involving the airport.
“I’m disappointed that it passed but we’re going to continue on in our efforts,” Turner said.
Although HB 399 was introduced as a statewide bill by Rep. David Knight (R-Griffin) — a member of the neighboring legislative delegations for Henry and Spalding counties — the circumstances it addresses are largely unique to Clayton County and Hartsfield-Jackson.
The bill is the latest in a list of legislation to be passed in recent years that cut off aviation-related revenue sources from Clayton County. A common argument made by officials is that HB 399 followed fuel tax exemptions the General Assembly granted to Delta Air Lines a few years ago.
That’s why the county’s negotiations with Atlanta are critical, Turner said.
“We’re trying to come to an agreement with the city of Atlanta, and we’re going back and forth about how to tax the airport basically,” Turner said. “Even if we come up with something to offset this, we’ll be good, but we can’t continue to take hits.”
The county had hired Twelve Oaks lobbying firm — which is run by Murphy Talmadge, the grandson and great-grandson of two former Georgia governors — to act as its lobbyist in an effort to stop the bill from getting out of the legislature. Although that effort ultimately failed, Turner had no regrets about hiring Talmadge.
“It’s a 50-50 coin toss anytime you go into a fight,” Turner said. “I think he put up a valid fight.”
Turner said the concessionaires hired additional lobbyists to push the bill through the General Assembly, but the Georgia Government Transparency and Campaign Finance Commission lists four lobbyists — the same ones listed last year — as representing the businesses.
“It was an uphill battle from the start,” Turner said. “Twelve Oaks, as well as everybody else that was involved, did good to keep it from getting as far as it could have gotten during the last session. We got it slowed down, but we fully expected it to resurface.”
But HB 399 may have only been the first step in addressing property tax revenues generated out of Hartsfield-Jackson. Knight introduced another piece of legislation, House Bill 693, last month to address ad valorem taxes on interests in real property by private businesses at airports.
That bill, which has no co-sponsors listed on the General Assembly’s website, is still sitting in the House of Representatives’ Ways and Means Committee. With nearly half of the 2014 legislative session already passed, there are only 20 days left for it to move through the House and Senate before it dies on Sine Die Day, which is expected to arrive in mid-March.
One of the provisions of HB 693 is that private businesses would be allowed to recollect “erroneously or illegally assessed” property taxes assessed by a local government. If the local government were sued by the private businesses over the taxes and lost, it would be required to pay the business’ attorney’s fees and costs as well.
Clayton legislators and county officials said they weren’t familiar with the new bill when asked about it at various times in recent weeks. But, when it was brought to their attention, they said it would be something else for them to address.
Like the HB 399 issue, this will be one more item related to taxes and the airport that the county will have to sort out.