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Smart move on request for annexation

POSTED: October 27, 2013 8:00 a.m.
 

Alpharetta, being a good neighbor and all, would love to annex some prime property in Forsyth County into its city limits, and has offered some big bucks to make it happen.

Forsyth County commissioners, to their credit, considered the option proposed by the city just across the Fulton County line, gave it due consideration, and said thanks but no thanks.

Good move.

Alpharetta had offered to commit at least $6.8 million toward an exit off Ga. 400 proposed at McGinnis Ferry Road, and to toss in another $700,000 to help boost economic development in the area that would benefit both the city and Forsyth County.

But the truth is, that McGinnis Ferry exit is going to be a big boon to Alpharetta anyway, and a pretty solid case can be made for the city helping to defray the required local portion of the cost regardless of any annexation consideration.

What our neighbors to the south didn’t mention in their proposal is what happens when a city annexes property from a county that collects local option sales taxes. In such a case, the city gets a piece of the sales tax pie, which over time would certainly amount to more money than Alpharetta proposed for the roadwork.

Currently the county has to share revenues from local option taxes only with the city of Cumming. Over the years, the city and county have had more than one rancorous round of negotiations over how much each entity should get from tax collections, but nothing like the debates that go on in counties with multiple cities to please.

If Alpharetta stretches across the border into Forsyth County, it becomes eligible for a share of the sales tax pie. And if Fulton County is collecting local option sales taxes, it gets a portion of that pie too.

In recent years, more and more cities have taken to annexations to improve their financial picture. And why not? When a city expands to take in property, it gets additional property taxes. And if it happens to cross a county line, it picks up additional sales tax revenues as well.

When it comes to the local sales tax program, Forsyth is fortunate to have only one city with which it must reach agreement on a tax distribution formula. Neighboring counties with multiple municipalities can attest to the difficulty of reaching a consensus when so many governments are involved.

For Alpharetta, the annexation proposal would have meant the addition of prime commercial property, a boost to city property taxes, and additional long-term sales tax revenues.

For Forsyth, the proposal would have resulted in an investment in a road project that is going to get done somehow anyway, a reduction in sales tax revenues for the county and for Cumming, and the ongoing necessity of negotiating with an additional government on distribution formulas.

Our commissioners deserve credit for realizing the proposed short-term gain fell far short of offsetting the long-term impact of such an annexation. Let’s keep Alpharetta as good neighbors, but on their side of the county line fence.

 

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