Public Goods: Funding Options
The need for more public goods will always be a result of populous growth. As more people decide to dwell in Douglas County, additional stress is put upon infrastructures like public safety, public parks, schools and water/sewer services. To be able to construct or upgrade infrastructures, counties and municipalities have to provide solutions to fund public goods.
For Douglas County residents, the debate over funding public goods has been ongoing since 2000. The inception of Arbor Place Mall would serve as a catalyst for rapid commercial and residential growth, increasing traffic, shrinking the water supply, overpopulating schools and stress public safety. To combat all those problems, both the County and City of Douglasville devised a plan to raise the sales tax by one percent, known as SPLOST.
However, as 2007 inches closer by the day, reliance on SPLOST will cease. This issue has forced both local governments to find a quick solution to fund public goods that are desperately needed. Losing Georgia takes a look at the three options Douglas County has focused on: property/sales taxes, SPLOST, impact fees.
Property, Sales Taxes
Just this year the City of Douglasville increased property taxes along with the Board of Education. The County followed suit raised the property tax to 8.24 mills, increasing the County’s budget by $5.7 million. Although the increases are small, Douglas County still has some of the lowest property taxes in the Metro Atlanta region.
Traditionally property and sales taxes are used to pay for public goods as well as government employee salaries. In Douglas County, property and sales taxes can not pay for public goods alone. This is evident from statements made by the County and City, the use of SPLOST, and talks of impact fees.
Taxes could be increased to help fund the creation of public goods, but would also have to pay for maintenance on public goods already in service. An example of maintenance from the raised property taxes on the County side would be for the Boundary Waters Aquatic Center. A projected $600,000 is to be used for maintaining the Aquatic Center. The argument here is, as more public goods are being provided, more taxpayer money is needed to maintain current public goods.
SPLOST
In 2002, the Douglas County Board of Commissioners and the City Council of Douglasville committed to initiating a Special Purpose Local Option Sales Tax (SPLOST) to pay for infrastructure needs and improvements. The joint-government effort resulted in producing many projects that would support much needed upgrades to the road system, renovation to public parks, and new vehicles and technologically advanced equipment for public safety.
On March 26, 2002, the SPLOST referendum was voted on by the public and was accepted by a narrow margin of 8.7% to collect no more than 102 million dollars to fund the creation of more public goods. On July 1st the sales tax increased by one percent, which mainly relied on the 65% of non-residential citizens who shopped at Arbor Place Mall.
Monetary collection from the new tax would last for five years, but questions over managerial procedures and mishandling of funds were raised by citizens in 2005, only three years into the SPLOST referendum. Under pressure by the community, the Board of Commissioners approved to have the Investigative Accounting Group, LLC. conduct a forensic audit of SPLOST funds collected and spent since the time of inception.
What came of the audit was a focus on the County’s procedures and documentation, while excluding the City of Douglasville, that produced some errors, wagers for SPLOST’s approval, and budgets being overrun.
In 2007 the current SPLOST referendum will come to an end, forcing the sales tax back down to 6%. Even though the core of SPLOST had good intentions, the public’s view of an unsatisfactory execution and accountability forced the demise of SPLOST.
Impact Fees
An alternative to fund public goods, besides an increase in the sales tax, is the form of impact fees, which have been of much debate in the past year. Impact fees are a fee set upon new development to fund infrastructures; new development being the cause of stressors upon the infrastructure and ultimately increasing the population growth.
In 1990 the Georgia Assembly passed the Georgia Development Impact Fee Act, which as based on Florida’s impact fee, to grant local governments to impose impact fees. Much like SPLOST, certain public goods could be financed to aid in the improvement of infrastructure like water-supply, waste-water and storm-water collection, flood control, parks, libraries, transportation and public safety.
Note that both SPLOST and impact fees do not include public schools. Douglas County has been debating the use of impact fees heavily in the past year, but records show that discussions about impact fees have been ongoing since 1998. Once again, if impact fees are to be imposed, it would have to take a joint effort by both local governments.
Developers and home builders despise impact fees because it is more money out of their pocket. However, the argument is not solely on money, but whereas whomever is a contributor to growth should also contribute to infrastructure improvements.
But, Boundary Waters operating costs cost only $18 taxes per year for an average household in Douglas County. That is tiny!
It is a great facility and it seems that a lot of people use it. I think it was a good investment.
September 21st, 2007 at 5:38 amMr. A. Nonymous, Good Investments shouldn’t lose $600,000 per year. No investor would buy this facility. Would you? If pools are a great investment why don’t private investors build them?
September 21st, 2007 at 8:42 am