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Georgia Education Taxes for Redevelopment, Amendment 2 (2008)

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This proposed ammmendment to the Georgia State Constitution was a referendum to adopt Senate Resolution 996, the Education Taxes for Redevelopment Act.

It was on the November 4, 2008 statewide ballot in Georgia.

Election results

ResultVotesPercentage
Approveda Yes 1,867,553 51.53%
No1,756,51848.47%

Election Results via: The Georgia Secretary of State

Specific Provisions

To authorize local school districts to use tax funds for community redevelopment purposes.


Senate Resolution No. 996 Resolution Act No. 777 Ga. L. 2008, p. 1211

“Shall the Constitution of Georgia be amended so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use tax funds for redevelopment purposes and programs?"

( ) YES ( ) NO


This proposal affirmed that the General Assembly may authorize counties, municipalities, and housing authorities to carry out community redevelopment.

The proposal also revised the Constitution's provisions relative to redevelopment powers and tax allocation bonds. As revised by the proposed amendment, the current provisions for community redevelopment, after providing for such powers, will contain revised provisions relative to tax allocation bonds. In general, tax allocation bonds are government borrowings which are repaid specifically from future growth in the property tax digest of an area under redevelopment.

Under the proposal a general law is be able to authorize the use of county, municipal, and school tax funds, or any combination thereof, to fund redevelopment purposes and programs, including repayment of tax allocation bonds. The general law may provide for such use of tax funds without regard to whether the local government approved such use before January 1, 2009. No county, municipal, or school tax funds may be used for such purposes and programs without approval by the applicable local governing body.

With respect to school taxes only, such taxes may be used for redevelopment purposes and programs only if: (1) they have been pledged for repayment of tax allocation bonds which have been judicially validated (approved by a court for issuance); or (2) such use is authorized by general law after January 1, 2009.


(Measure Text and Discussion from www.sos.ga.gov)


Senate Resolution No. 996

The measure was legislatively referred to the ballot by the General Assembly.

The text of the measure is, "Proposing an amendment to the Constitution so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use tax funds for redevelopment purposes and programs, including the payment of debt service on tax allocation bonds; to provide for submission of this amendment for ratification or rejection; and for other purposes."

Background

Currently, the Georgia Constitution states that "school tax funds shall be expended only for the support and maintenance of public schools, public vocational-technical schools, public education, and activities necessary or incidental thereto, including school lunch purposes." Amendment 2 was designed to negate a 2008 Georgia Supreme Court ruling that found that Tax Allocation Districts were unconstitutional because they used educational funds for purposes other than education.[1] Proposed Amendment 2 would allow schools to vote to participate in Tax Allocation Districts (TADs). Tax Allocation Districts enable local governments to fund developing a property because of the anticipated higher tax revenues that the development is expected to generate. The impact of this measure is highly debatable, and could be positive in some cases.[2]


What is a TAD?

  • A Tax Allocation District (or TAD) is a geographic area established for the purpose of publicly financing certain redevelopment activities in underdeveloped areas. The redevelopment costs are financed through the pledge of a future incremental increase in property taxes generated by the resulting new development.
  • Typically, TADs raise revenue by issuing bonds which pay for public improvements that attract or facilitate redevelopment. Property tax base values rise from redevelopment, and in the end, the bonds are repaid with the resulting increase in revenues.
  • Click Here for a more detailed explanation of how a TAD works.


Where are TADs in Georgia?

  • Click here to take a look at an interactive map of TAD locations throughout Georgia. Zoom in and out and click on the pushpins for more information.


Are there different types of TADs?

  • TADs have been implemented for many purposes, but generally fall into three main categories:
    • Commercial development in undeveloped or underdeveloped corridors ;
    • Urban revitalization or to create a new town center ;
    • Multiple objectives (e.g., vacant shopping centers, obsolete housing, unusable apartment projects).


How are school boards involved in TADs?

  • On November 4th, we will vote on a constitutional amendment to decide whether to restore individual school board’s abilities to opt in to newly created TADs. A court ruling earlier this year barred school boards from participating in TADs throughout Georgia.
  • School districts are often the key to making TADS work. Most jurisdictions gather a large portion of property taxes from school districts, close to 50 percent in some cases. Therefore, giving schools the opportunity to participate in TADs, provides a valuable economic tool for success in our communities.
  • Before choosing to participate in a TAD, school districts in Georgia are free to negotiate specific benefits that assist them in building the capacity to educate more kids, increase the quality of education, or improve or build new facilities.


How does this measure relate to the Atlanta BeltLine?

  • A TAD is expected to be the primary local funding source for the Atlanta BeltLine project and it’s expected to generate about $1.7 billion for the project.
  • The Beltline, which will combine green space, trails, transit, and new development along 22 miles along the urban core, is required to use all of its TAD funding on parks, trails, transportation infrastructure andother public amenities, and also to acquire land and transit right-of-way.
  • Approximately half of the BeltLine's TAD funding depends on the whether or not the Atlanta Public School Board's is allowed to particpate in the Beltline TAD.



Specific provisions

The ballot measure is proposed as an amendment to Article IX, Section II, Paragraph VII of the Georgia Constitution.

If the measure passes:

  • The General Assembly may authorize any county, municipality, or housing authority to undertake and carry out community redevelopment.
  • The General Assembly is also authorized to grant to counties or municipalities the power to:
  • Issue tax allocation bonds
  • Enter into contracts for any period not exceeding 30 years with private persons, firms, corporations, and business entities.
  • Authorize the use of county, municipal, and school tax funds, or any combination thereof, to fund such redevelopment purposes and programs, including the payment of debt service on tax allocation bonds, regardless of whether any county, municipality, or local board of education approved the use of such tax funds for such purposes and programs before January 1, 2009.
  • No county, municipal, or school tax funds may be used for such purposes and programs without the approval by resolution of the applicable governing body of the county, municipality, or local board of education.
  • No school tax funds may be used for such purposes and programs except as authorized by general law after January 1, 2009.

Supporters

Supporters Include:


  • A. Brown-Olmstead Associates
  • The Association County Commissioners of Georgia (ACCG)
  • American Institute of Architects, Georgia Chapter
  • Atlanta Committee for Progress
  • Atlanta Development Authority
  • Central Atlanta Progress
  • Georgians for Community Redevelopment
  • Georgia Chamber of Commerce
  • Livable Communities Coalition
  • Metro Atlanta Chamber of Commerce
  • Park Pride Atlanta
  • Savannah Chamber of Commerce
  • The Beltline Partnership
  • Trust for Public Land



Arguments in Favor

  • The amendment just gives school boards the option to participate in redevelopment, it is up to each school board to then determine whether to participate or not.
  • All existing school taxes continue to go to the schools. Only if new additional development occurs are the additional taxes used to provide project infrastructure.
  • From 1999 to 2008 school boards in Georgia overwhelmingly chose to participate in redevelopment when they had the chance, it helps them grow their tax base and increase sales taxes used for school construction.
  • 49 States and the District of Columbia use tax increment financing as their main development incentive, TADs, which are Georgia’s version of tax increment financing, is nothing new or innovative.
  • School districts do not face any additional debt burden from the bonds, they are issued by the City or County.
  • Over $450 million in TAD bonds have been issued in Georgia since 1999 and there have been no defaults. These bonds have triggered over $3 billion in additional private investment.
  • TADs are most typically used to trigger redevelopment in areas which are declining or slow growing, accelerating the growth of the local tax base.
  • The current economic downturn makes TAD even more important as a tool to create jobs and expand the local tax base.


Are TADs really that important? Yes. TADs will redevelop our neighborhoods, stimulate growth and revitalize our communities.

TADs are especially designed to promote redevelopment in areas not otherwise likely to be targets for redevelopment. For example, Atlanta’s Atlantic Station (link), East Point’s Camp Creek Marketplace (link) and Woodstock’s Downtown (link) are here today because of TADs. Tax Allocation Districts are a national best practice in providing gap financing for redevelopment projects in slow or no growth areas. TADs can attract investment to areas that have high concentrations of poverty and help bring life back to these communities.


Opponents

Opponents include:

Editorial Opponents:

  • Jim Wooten of the Atlanta Journal-Constitution

Arguments in Opposition

  • Overuse of TADs can lead to subsidies for development that might have occurred on its own.[2]
  • It could allow education money to be used to benefit developers rather than education.[6]

See also


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