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http://www.macon.com/mld/macon/8011790.htm
Posted on Sun, Feb. 22, 2004
SPLOST Q&A
By Travis Fain - Telegraph Staff Writer
Here are answers to some basic, and some
not-so-basic, questions about the SPLOST, as researched by The
Telegraph, based on interviews with city, county and state officials
and a review of public documents.
What does SPLOST stand for and what is it?
Special purpose local option sales tax, a tax
that only county commissions can authorize, which must be first
approved by referendum. State law allows it to pay only for capital
projects, such as roads or buildings, or to retire debt on capital
projects that have already been built.
What will the new total sales tax be and how
does that figure break down?
Seven cents on each dollar spent, up from the
current six. The sales tax would fall back to 6 cents on the dollar
after March 2005, when the current schools SPLOST is set to expire.
However, it would remain at seven cents if voters decide to renew the
schools tax.
Four of those 7 cents go to the state of
Georgia. Another penny, an existing local option sales tax or LOST, is
split between the city and the county. Another penny goes to the school
board in a SPLOST for school construction that began in 1999. The
seventh penny voters will decide March 2. Seven cents on the dollar is
the maximum amount of sales tax allowed by state law.
What will this tax pay for?
Here's what's included: $66.8 million to retire
debt, specifically $19.2 million to retire school construction bonds
initially issued in 1993, $29.5 million to cover bonds recently
approved by the county to fund the court-ordered jail expansion, $16.2
million to pay off bonds used to build the Coliseum and $1.9 million to
pay off city bonds issued in 1976. There's $60 million for recreation
projects; see a full list on this page. About $4 million for a
350-space parking deck near City Hall and the city auditorium and
another $8.7 million to move the tax commissioner's office out of the
courthouse and build a 550-space parking deck near the courthouse. Also
included: $500,000 for a new driver's license bureau, the location of
which hasn't been decided.
That's $140 million in projects. If the tax
raises more revenue, officials have agreed that money will go toward
more recreation projects.
How much money will the tax raise?
No more than $160 million, not including
interest, but the exact amount will depend on collections, which depend
on how much people spend in Bibb County. Officials have estimated the
tax will bring in $28 million a year for five years, which is how they
arrived at a project list totaling $140 million. That estimate is based
on current collections of a similar penny tax. The county's roads
SPLOST, which ran from 1995 to 2000, collected about $126.7 million
over five years, plus about $18.4 million in interest. Since this
SPLOST is likely to be spent more quickly than the roads money,
interest earnings "aren't going to be near $18 million," according to
Bill Vaughn, the county's chief administrative officer.
What interest savings will be realized by
retiring debt?
Officials peg that number at $16 million,
savings realized because existing bonds will be paid off much faster,
allowing less interest to accrue. However, since the county plans to
issue new bonds to finance projects before much of the sales tax
revenue is collected, some new interest payments will be assumed.
Vaughn estimates that interest at about $900,000. That's based on a
preliminary plan to issue about $22.7 million in bonds up front. It's a
rough estimate, given that bond interest rates, and the total amount of
bonds that will actually be issued, are not yet known.
How will debt retirement affect future
budgets?
Debt savings will free up money in various
county and city budgets for several years, potentially pre-empting tax
increases. For the school board, retiring debt will free up about 1.2
mills a year in the school's millage rate, which is the rate used to
compute tax bills.
That's about $4.3 million that can go back into
the schools budget in 2006, for example, according to figures from
Vaughn.
By paying off the jail debt the county
commission will free up money in its general fund - to the tune of $2.3
million in budget year 2006, for example. That corresponds to about .66
mill in the commission's millage rate. The city will have an extra
$955,000 a year in its budget from debt savings, according to Vaughn's
figures.
In addition, paying off the Coliseum bonds will
free up, according to city and county numbers, about $376,000 a year in
city and county hotel-motel tax revenues that have been used to pay
down that debt. That money must be spent to promote tourism, but just
how it would be spent would have to be decided by city and county
leaders.
When would the new tax start and end?
It would start July 1 and end five years later,
or after $160 million has been collected, whichever comes first.
Officials expect the five years will expire first, and past SPLOSTs
have followed this pattern.
What leeway will officials have to change
what projects will be done, and how much those projects cost?
A good bit. Officials must abide by the language
of the referendum ballot, but that only sets out the various spending
categories, such as the debt payoffs. The city and county have agreed
on a list of recreation projects, and officials have said they will
abide by that list. But the law allows them to add or delete projects
or to alter the amount spent on them.
Who has the final say over what projects are
done and in what order?
According to the agreement between the county
and the city, a five-person executive committee made up of the mayor,
City Council president, County Commission chairman and vice chairman
and a representative of NewTown Macon will decide when projects are
done. State law grants most SPLOST powers to county commissions but
this agreement gives ultimate spending authority to the executive
committee, according to County Commission Chairman Tommy Olmstead.
What projects will be done first?
Debt retirement will have the highest priority,
according to the city-county agreement. After that, it depends on the
executive committee.
The county can issue up to $35 million in bonds
in order to have money on hand for projects without having to wait for
collections to roll in, but a final decision has not been made on how
much new bond debt to issue. Vaughn has drawn up a potential finance
plan based on the assumption that the county will only issue $22.7
million in bonds up front. That would be $12.7 million to pay for
parking decks and the new tax commissioner's office and another $10
million for the county and city to split for recreation projects. Other
projects would be paid for as the sales tax is collected and the new
bonds would not be used to retire existing debt. Both Olmstead and
Mayor Jack Ellis have committed to funding some recreation projects in
the first year of the tax.
Who's running the pro and con campaigns?
Several area leaders have formed a group called
Bibb SPLOST 04 to promote the tax. The campaign is chaired by John
Shoemaker, CEO of Riverside Ford and former chairman of the chamber of
commerce, and Bettye Hutchings, a retiree who has worked in recreation.
As of Friday this group had collected about $15,500 and spent just
under $10,000 on various brochures, advertising and neighborhood
canvassing. On the con side, several area leaders are running
campaigns. State Rep. David Lucas and his wife, City Councilwoman
Elaine Lucas, have bought ads against the SPLOST, as has City
Councilman Henry Ficklin. Former mayoral candidate and Libertarian
David Corr is campaigning against it. So is local dentist and activist
Lindsay Holliday and other members of CAUTION Macon, a group that
organized to oppose roads projects financed by the last county SPLOST.
NewTown Macon isn't formally taking a position
on the tax, but it is paying for a self-described educational campaign
to inform voters what the SPLOST includes and what repercussions are
expected if it does not pass. NewTown has hired Margaret Hylton Jones -
the same woman being paid to run Bibb SPLOST 04's promotional campaign
- to handle this effort. As of Friday NewTown said it had spent about
$16,500 on its campaign.
Also, the local convention and visitor's bureau
and chamber of commerce, as well as various other local organizations,
support the tax.
How will the money flow?
Retailers collect all sales tax revenue and turn
it over to the state, which takes its 4 cents on the dollar for the
general treasury. The rest is distributed back to the county, minus an
administration fee of 1 percent. It generally takes about two months
from the time of a sale for the money to show up in county coffers.
How much is the sales tax in neighboring
counties?
The rate in Monroe, Crawford, Houston and Twiggs
counties is 7 percent. In Peach and Jones counties it's 6 percent, but
Jones County is set to increase to 7 percent this April. For a list of
rates in all Georgia counties and more information about sales tax, see
the Georgia Department of Revenue's Web site, www.gatax.org and click
on the "sales and use tax division" link.
How will the new tax affect major purchases
in Bibb County?
With vehicle purchases, the state requires
dealers to charge sales tax based on the county where a vehicle is
delivered to the customer.
Often dealers will deliver a vehicle to the
customer's home if sales tax is lower there. Because of this, various
car dealers said they expect a local sales tax increase would have
little effect on business. Ken Jones, who owns a Macon electronics
store called Ken's, said he expects minimal effects from the tax,
though he does have some customers who travel to his Macon store
because the current 6 percent sales tax is lower than they'd pay at
home.
How much of the money will come from outside
Bibb County?
Because Bibb County is a shopping hub for Middle
Georgia, officials have said about 40 percent of the sales tax revenue
will come from outside the county, a figure based on a study from
several years ago that counted out-of-county license plates at area
shopping centers. The Georgia Department of Revenue has no records to
show how much sales tax is actually paid by out-of-towners, according
to a spokesman.
When this tax expires, will voters be asked
to approve another one?
Probably. One of the principal complaints about
this SPLOST plan has been that not enough funding is earmarked for
recreation projects. Olmstead has said the way to solve that is to do a
good job spending this SPLOST, then ask voters to approve another one
to fund more recreation projects. School officials have said they may
seek another SPLOST when the current school building tax expires.
What have previous SPLOSTs accomplished and
what are some complaints about them?
The schools SPLOST funded construction of 10 new
schools and renovations at another 14, according to a projects summary
from the school board. Some people are upset because a new high school
for north Macon, which was planned before the SPLOST passed, was
delayed.
The county's roads SPLOST has built, widened or
beautified dozens of roads, with more construction to come. But critics
say some of the roads were overbuilt and there are concerns that
planned widenings of Forest Hill Road and the Western Loop, which will
include Tucker, Foster and Bass Roads, will be too large for the
neighborhoods they run through. The roads program, which is run by an
executive committee very similar to the one planned for the new SPLOST,
spawned CAUTION Macon, a citizens watchdog group that has battled the
roads program over some projects.
To contact Travis Fain, call 744-4213 or e-mail
tfain@macontel.com
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