Let me begin by saying that I think, for the most part, that “special purpose local option sales taxes” are generally a poor way for governments to raise money. If individual public capital projects are truly worth doing, then elected and appointed officials should be able to explain the value of those projects to their constituents. Then they should be able to find funding for those projects — from other programs, from existing tax revenues, from state and federal governments, from the private sector, or from tax increases.
But that’s not the way things work in Georgia. Voters are routinely asked to raise their sales tax rates — and voters seem to approve such tax increases almost all the time.
The state sales tax is 4%, and most municipalities routinely add the “local option sales tax” (LOST) of an additional 1% that goes into local government coffers, which is not subject to a popular vote. But for the last few years in Chatham County we have also been adding a 1% “special purpose local option sales tax” (SPLOST) to fund everything from drainage projects to a new arena, and a 1% “education special purpose local option sales tax” (ESPLOST) to fund capital projects for public schools. Local media frequently refers to these at “penny sales taxes”, but we shouldn’t confuse 1% with a penny. On a purchase of a $10,000 car, each additional 1% is another $100 in taxes.
The general approach to selling these 1% special purpose taxes to voters is to include a laundry list of funded projects — i.e., something for everyone. If enough voters see a benefit to themselves or their neighborhoods, SPLOST and ESPLOST get a thumbs up.
But have times changed?
The current ESPLOST is expiring, and local public school officials are hoping to continue the tax. Check out Savannah-Chatham schools seeking another education sales tax in today’s Savannah Morning News. Even though the vote is about four months away, there’s no final list of projects. From the article:
Getting a another round of the sales tax passed, however, will require officials to come up with a list of projects that the majority of local voters will rally around. So a series of public meetings are being organized this month to find out what the public wants.
“We’re wide open,” said Otis Brock, operations chief for Savannah-Chatham public schools. “We want the public to come and bring their thoughts and suggestions.”
There’s no mention of the planned west Chatham high school in the article, but as far as I know that project using ESPLOST funds is still in place. However, the school will not be entirely finished with existing money, and it’s likely that a new ESPLOST list will include funds to build an auditorium.
Given that the high school site is in New Hampstead, an empty “neighborhood” that stands as a monument to the hubris of the housing bubble, the construction and the inevitable appeal for additional tax money strike me as terrible wastes of precious financial resources. I have been consistently critical of the chosen site because of its distance from existing schools and population centers, like in this column, but my concerns have gained little traction with the public.
Believe me, when that school is finished and Pooler residents realize how far away it is, then they’ll agree with me about the location. By then, of course, it will be too late to do anything.
It’s going to be really tough for me to consider voting for a new five years of ESPLOST if the school system is making decisions like that one, which fuels sprawl, wastes transportation dollars, and needlessly extends the system’s infrastructure, which then will require more money to maintain. (The New Hampstead site is also likely to require millions more to be spent to widen portions of Little Neck Road.)
Savannah area voters are also likely to be faced this fall [UPDATE, 7/6: other sources are saying the vote would at the same time as the 2012 primaries] with a vote on the new TSPLOST — a special purpose sales tax for transportation infrastructure. (If we have SPLOST, ESPLOST, and TSPLOST, our sales tax rate will be 8%.) The latest details on that vote can be found here in the Savannah Morning News.
I’m absolutely in favor of spending money to improve the bridges on highway 80 from Savannah to Tybee, but I have mixed feelings about some of the plans for Derenne Avenue and about the proposed widening of I-16 (another project which incentivizes sprawl).
Like ESPLOST, TSPLOST is going to be a tough sell with me. And I’m someone who believes in bold public investments in the community.
Clearly, a lot of other voters will be more skeptical this time around than they were in the past about the various SPLOST votes.
The country is in an anti-tax mood. The local public schools and the county commission both recently raised the property tax rate. The estimated revenues for the current SPLOST and ESPLOST collections were wildly overoptimistic, which has meant a steady scaling back of project commitments. Who knows, for example, if Savannah will ever get a new arena, which was a cornerstone of the last SPLOST vote. (The current SPLOST, btw, continues for a couple more years.)
I’ll post more soon about the site of the proposed West Chatham high school, including pictures and maps.
And I’m going to be scrutinizing, much more closely than I have done in the past, the lists of proposed projects on this blog and in my column in the SMN.