The voice of county governments in Georgia is seeking a change in the rules of a 16-year-old sales tax that funds construction projects all over the state.
If Association County Commissioners of Georgia gets its way, instead of solely funding construction, special purpose local option sales tax revenue could be used for maintenance and operation costs of the SPLOST-funded projects.
Currently, the voter-approved 1 percent sales tax can be used only to fund the construction of big-ticket items, such as parks, libraries, roads or sewer lines.
Once those projects are built, their operation is largely funded through property taxes and user fees.
The association wants Georgia's law changed in 2012 to allow as much as 15 percent of sales tax revenue to be used for operating costs.
The flexibility would require a constitutional amendment in Georgia. No state lawmaker has signed on to carry the law through the Gold Dome.
Association spokeswoman Beth Brown said the change, if approved, would create more flexibility for local governments whose budgets have been hit hard by the recession.
Brian Tam, chairman of the Forsyth County commission, said it has not formulated a position on the proposal.
Allowing operating costs to be included in a sales tax could impact it by adding a new facet of funding, Tam said, but added that government should be working in the current framework.
“I think to operate them, you just need to be efficient and as good of stewards as you can be with the taxpayers’ money,” he said.
Tam added that not all capital or improvement projects in a sales tax program cause operating costs to rise.
In November, Forsyth County voters approved a six-year extension of the 1-cent sales tax, which includes funding to expand the jail.
“We hope that some of our [jail] operating costs will go down,” Tam said, “because we won’t be spending so much money to house prisoners outside of the county and transport them back and forth.”
In a recent meeting with the local legislative delegation, the Hall County commission asked lawmakers to consider the change, though county administrator Randy Knighton said there is not a specific local issue connected to the request.
Local governments all over the state have faced a loss in property tax revenue this year, due to declining property values. Sales tax collections used for government operations are also down.
"The past budget year was extremely challenging," Knighton said. "... In terms of personnel, that is a significant cost of maintaining a project, as well as the overhead cost.
“All of that is necessary for a capital project to actually function and meet the needs of citizens."
Brown said there are similar situations in counties across the state.
"We're trying to find different ways that we can provide flexibility that these funds could be used at the local level," he said.
As the association has proposed the changes, Hall County wouldn't be able to reap the benefits until the next round of the tax, which must be approved by voters.
The proposal is for the change to affect future sales tax votes. Like other projects the tax funds, operation of both current SPLOST projects and past ones would be a line item on the ballot.
Hall Commission Chairman Tom Oliver said he supports the association's efforts to change the law.
He's also optimistic that the bill, if introduced next session, would pass.
If introduced in the state House of Representatives, the bill would likely face the scrutiny of the Ways and Means committee, where state Rep. Chuck Sims, R-Ambrosia, serves as secretary.
Sims said the association’s efforts aren't new. However, he's not confident the lobbying group will be successful in 2012.
Sims thinks the provision allowing for special sales tax funds to be used for operation may make the tax less palatable to voters.
But even if legislators see the merit, they may still be hesitant to sign their names to a bill to change the law in 2012, an election year.
"I don't know who would want to carry that bill," Sims said. "I don't want to... you're in an election year. It's going to be hard to pass a tax bill in an election year."
Rep. Mickey Channell, chairman of ways and means, said he too isn't sure the bill will make it anywhere this year.
Though he said he hasn't made up his mind about the request, he said it warrants a discussion.
Channell, R-Greensboro, said he doesn't think property owners, who by and large fund much of the operation of local governments, should have to shoulder all of the burden of maintenance and operation of sales-tax-funded projects.
"I think there's some merit in at least talking about it," he said. "The alternative, frankly, at the county level is ad valorem tax."
FCN Staff writer Alyssa LaRenzie contributed to this report.