The need for a new arena in Savannah and the next SPLOST vote

Back in 2006, the last time Chatham County voted on a new round of SPLOST (Special Purpose Local Option Sales Tax), the referendum was approved rather handily by a vote of about 60-40. Of course, that was also a specially called election, so turnout was really low.

This fall, we’ll be voting on a new round of SPLOST — a 1 percent sales tax to fund a specific list of projects compiled by the County and by each of Chatham’s municipalities.

Given the politics, I’d say that there’s a very good chance that the referendum will fail.

I can already tell I’m going to pull my hair out trying to answer the same questions over and over, so consider this short post my opening salvo .  . .

Sales taxes have an inherently regressive quality, but SPLOST is virtually the only mechanism for the community to make significant investments in infrastructure. It’s worth keeping in mind that somewhere around 1/3rd of the total tax is paid by visitors. There are some SPLOST projects that have been delayed dramatically over the years and some that haven’t been completed at all, but the majority have been delivered as promised. Click here to see a full list of Chatham County’s promised projects and their status.

Of course, the 2008-2014 SPLOST collection fell far, far short of original estimates because the economy tanked. Combined with other shortfalls, the City of Savannah’s planned arena and new police headquarters could not be funded.

So it looks like Savannah will seek $120 million from the next SPLOST to cover the new arena that we desperately need. Will city voters approve a list that has the same major project that they approved back in 2006?

I wrote about the problem in a column earlier this year:

Whether the vote is held this year or next year, elected and appointed officials are definitely going to have some explaining to do.

Citizens will be repeatedly asking why major projects from the 2006 list haven’t been finished or, in some cases, even started.

There are fairly straightforward answers for the inevitable questions, but there’s so much cynicism right now that many voters simply aren’t going to accept the explanations.

Voters’ frustrations about incomplete SPLOST projects are due primarily to the protracted economic downturn.

When voters went to the polls in 2006, officials estimated the tax would raise $445 million countywide.

After a deep recession and a weak recovery, SPLOST’s final haul will be about 15 percent less than that, something like $379 million.

But the real effects of the downturn went much deeper.

Since Chatham County’s new jail was guaranteed full funding, the rest of the municipalities’ project lists had to be trimmed by closer to 20 percent.

Even that number understates the problem, since some major projects were never expected to be fully funded by SPLOST dollars in the first place.

The city of Savannah’s proposed new public safety headquarters and new arena, for example, would have needed tens of millions from other revenue sources beyond the 1 percent sales tax.

The economic decline decimated those additional revenues too.

The city hasn’t done itself any favors with the questionable delays and occasional backtracking in plans for the new Cultural Arts Center, which was approved in 2006 and is one of the projects that will be completed, in part by diverting a portion of the money budgeted for other projects.

Despite the relatively clear explanations for the lack of money to build the arena or the police headquarters, we’re going to keep hearing people ask, “What happened to the money for the arena?”

It’s pretty simple: because of the deep recession and the way that the SPLOST monies were divided up via the agreement in 2006, we never came even close to raising enough money to pay for a new arena and all the other promised projects.

It would be possible, but quite difficult, for the city to pay for a new arena without a new round of SPLOST.