FORSYTH COUNTY — Forsyth County officials on Tuesday reviewed the findings of a study they had commissioned about the financial impact of a proposed second city.
The study was conducted in 2015, well ahead of the announcement last week that the local state legislative delegation had withdrawn the bill to create Sharon Springs over concerns with the “city light” concept.
Sharon Springs would have had about 50,000 residents and covered an area in south Forsyth stretching from the Fulton County line to Hwy. 20 with an eastern border of the Chattahoochee River and the western border of Ga. 400.
Had the proposal cleared the Georgia General Assembly this winter, a referendum in November would have let voters living in that area decide on cityhood.
Alfie Meek, director of the innovation strategy and impact team at Georgia Tech, shared the report with the county commission.
“[Sharon Springs] would represent about 34 percent of the gross real digest of the county, while only representing about 16.5 percent of the land area,” Meek said. “Which means, obviously, that the more high value property must be located [there].”
As a proposed “city light,” Sharon Springs would have had a minimum of three services — zoning, sanitation and code enforcement. Meek said that had the city existed in 2014, the last full year for which data was available at the beginning of the study, Forsyth County would have saved up to $769,384.
Those savings would have come from expenses and the salaries and benefits of employees who handle code enforcement and zoning that would no longer be needed. There would not be a positive or negative impact from sanitation services.
The potential loss of revenue likely would have been more detrimental to Forsyth. Meek estimated the county could have lost millions through the loss of alcohol licenses and excise taxes, cable franchise fees, planning and zoning, insurance premiums and business licenses and occupation taxes.
“We have a $769,000 savings, but we’re going to lose $6.2 million roughly in revenue, which gives us a revenue gap of $5.4 [million],” Meek said.
“You current millage rate is 4.182 on the general fund, at least it was in 2014,” he said. “You would need about .623 mills to make up that difference. [That] would translate to about a 13 percent increase across the board on the property tax millage.”
Meek also said Sharon Springs would not have had enough services to collect sales taxes, but that it would have been eligible for a share of the next 1-cent sales tax extension.
The study was the second on the financial impact of the city, after supporters of Sharon Springs also commissioned a study, performed by the Carl Vinson Institute at the University of Georgia, which found a second city feasible.
A major swing factor in the revenue gap detailed in the Georgia Tech report was the insurance premium tax, a 1-cent levy the county uses to design and build roads.
If the county chose not to perform those services in the city, or the city remitted the money that it is eligible to receive back to the county, then the revenue gap would drop to about $3 million and the tax increase would drop to 7.2 percent.
While supporters of Sharon Springs have said the new city would provide more direct control to residents, opponents have maintained it would increase taxes and grow government. Meek said a property tax increase would be likely to make up funds.
The Carl Vinson study was more supportive of cityhood, though Meek said the two were asked to look at different areas.
“Carl Vinson does great work, and their study and their numbers are good, but they were asked to answer different questions,” Meek said. “You just need to ask both sets of questions and get both perspectives.”