“State constitutional Amendment No. 2 would change Georgia’s constitution to give school districts the right to participate in tax allocation districts, or TADs. TADs let communities pay for today’s public improvements using tomorrow’s increase in property tax revenues which would come about through redevelopment,” Livable Communities Coalition Executive Director Jim Durrett said. “This is a tool which has applicability across the state of Georgia.”
The initiative is designed for the purpose of creating tax allocation districts (TADs) to finance redevelopment activities using the public dollar, including building construction or renovation, public works improvement, rehabilitation, demolition or expansion of existing buildings. If passed, it will provide development for projects within the school system that would not be funded any other way.
“If this amendment does not pass, school districts will not have a choice to participate in supporting appropriate redevelopment in their communities,” Durrett said. “Communities across the state will lose a valuable tool to stimulate jobs, economic growth and development.”
A study conducted on the performance of TADs in Georgia and commissioned by the Livable Communities Coalition found they attracted significant private investment and boosted property tax bases. As of mid-2006, five Atlanta TADs had attracted private investment at seven times the amount of public TAD spending. The study also found that property tax bases inside TADs in Georgia rose an average of 300 percent faster than the surrounding communities.
The initiative, known as Amendment 2, would reinstate school districts’ ability statewide the right to participate in TADs—which they have been unable to do since February. While this amendment is being put to a vote on a statewide level, the decision of whether to actually initiate it will be left to the communities themselves. If the amendment does pass next month, school districts will have the opportunity to opt in each time a TAD is created.
“It is designed to allow school districts to have the option to participate,” Ken Bleakly, president of Bleakly Advisory Group in Atlanta, said.
Some of the communities in Georgia currently or wanting to participate in a TAD program are located from metro Atlanta to Augusta to Savannah. All but one or two school districts in the state have shown interest in the initiative.
“More communities have voted to participate,” Bleakly said. “We will see the power of the redevelopment tool if it passes.”
Every state has it’s version of TAD, which serves as the main redevelopment tool to the organizations needing them the most. The school portion of the property tax is typically about 50 percent or more of the total tax collected—which means that the elimination of school tax would hamper economic growth, as well as the ability for TADs to generate funds for infrastructure investment.
“The amendment’s failure to pass will mean the system will not be as effective,” Bleakly said. “It hurts smaller cities with smaller projects more.”
Dougherty County Schools Director of Public Information R.D. Harter offered a personal statement regarding the initiative.
“As a taxpayer I think it would be beneficial because it would be an additional source of money,” Harter said.
Harter also said that while TADs have never been used in Dougherty schools before, there is interest in the initiative among some members of the school board.
“Times are hard, we are losing money from other sources,” Harter said. “We have experienced tremendous budget cuts, so additional sources would be welcomed.”
Currently, 49 states and the District of Columbia have enabling legislation for tax increment financing. There are currently 50 approved TADs in Georgia. The City of Atlanta has issued $410 million in TAD bonds since 2001, which has leveraged $2.3 billion in private investment and created more than 2,400 construction jobs and 6,500 permanent positions, information released by the Atlanta Development Authority said.
For more information visit www.georgiatad.org.
