Where does each penny of your sales tax money go?
Columbus voters could be asked to approve the highest sales tax in the city’s history on the November 2020 ballot.
Why? In order to replace the decaying Government Center and fund other projects, the Columbus Council wants to raise $350 million over 10 years from the same kind of special sales tax that local schools have relied on for the past two decades.
But that would mean either a new tax on top of the existing one, or Muscogee County School District giving up its tax money, at least temporarily.
The school district’s current 1% special sales tax expires June 30, 2020, and the council is banking on the school board not putting another request on the November ballot to keep the tax rate at the current 8%.
Columbus voters have always passed and renewed the school district’s tax referendum each of the four times it’s been on the ballot, dating back to 1997.
The school board hasn’t decided whether or when it would ask voters for another renewal. But if the city council and school board both seek the 1% special sales taxes next year, or any time before the regional sales tax for transportation expires at the end of 2022, they would be asking voters to accept a total of 9% in sales taxes — the highest in Columbus history.
Here’s what you need to know about the possible taxes, what’s at stake and what city and school board leaders are saying about the issue.
What’s a SPLOST?
A SPLOST is a Special Purpose Local Option Sales Tax.
SPLOSTs are attractive ways to raise public money because they don’t require using the operating budget, reserve funds, raising property taxes or borrowing money. They also mean anyone who buys something in that county or city — even if they don’t live there — helps pay for the SPLOST projects.
They also give voters the say-so to directly support or oppose the request.
One argument against SPLOSTs is that they force voters to approve what really are two different questions at one time: Do you want these projects? Is a sales tax increase the best way to pay for them?
Another argument against SPLOSTs is that, like sales taxes in general, they are considered regressive. That means folks with lower incomes contribute a higher share of their spending money because everyone is taxed at the same rate.
Using a SPLOST to fund projects requires patience, because you must wait for the pennies to pile up, unless you borrow money up front and use the SPLOST revenue to pay off the debt, which ends up costing the public more money due to interest payments.
What can the money be used for?
Starting in 1985, the Georgia Legislature gave county and qualified city governments the authority to ask voters to approve a 1% sales tax that would pay for specified capital projects.
Those projects are defined as “major, permanent or long-lived improvements or betterments, such as land and structures, … as distinguished from current expenditures and ordinary maintenance expenses.”
Examples of capital projects are civic buildings, facilities, infrastructure and equipment.
Georgia voters in November 1996 passed the constitutional amendment that allows local school boards to authorize a referendum asking voters to approve a SPLOST for education, also known as an ESPLOST.
A school system’s ESPLOST expires either when the amount specified is collected, or when the ESPLOST has been active for five years, whichever comes first.
According to Deputy City Manager Pam Hodge, because Muscogee County and Columbus are a consolidated government and will be issuing a general obligation debt in conjunction with the SPLOST, there is no specified end date and the SPLOST is active until all of the revenue is generated.
Where your sales taxes go
The current sales tax in Columbus totals 8%:
- 4% is the state’s sales tax. It doesn’t expire.
- 1% is the city’s LOST (Local Option Sales Tax). It doesn’t expire. The revenue pays for services that otherwise would be funded through property taxes.
- 1% is the city’s OLOST (Other Local Option Sales Tax). It doesn’t expire. The revenue funds expenses for public safety (70%) and infrastructure (30%).
- 1% is the school district’s ESPLOST. It expires June 30, 2020. The revenue funds capital projects for education.
- 1% is the regional TSPLOST. It expires Dec. 31, 2022. The revenue funds capital projects for transportation.
Councilors, board members weigh in
Mayor Skip Henderson told the L-E that it would be unusual for both the school district and the city to have a SPLOST go into effect at the same time, but not impossible.
Both have had two periods of approximately four years when their SPLOSTs have been active at the same time: from January 1998 through December 2002, and from April 2004 through September 2008. But they were never placed on the same ballot, and were active before a TSPLOST was ever on the table.
Columbus Council plans to vote on a final list of projects by the end of July 2020 and have the new SPLOST go before voters on the Nov. 3, 2020 general election ballot. That’s also the first ballot on which the school system could place an ESPLOST referendum after the current tax expires.
If both are approved, Muscogee County would be one of only three entities in the state with a sales tax rate higher than 8%. The other two are the city of Atlanta and Ware County in southeast Georgia, according to the Georgia Department of Revenue’s website.
Henderson said the school district could pursue another ESPLOST when the TSPLOST expires, and said he has been in communication with MCSD Superintendent David Lewis since February. That was when the mayor first announced his intention to ask the council to support a SPLOST.
“They know what our plans are,” Henderson said. “We wanted to make sure as a collaborative partner with government that they knew what we were doing.”
But Lewis didn’t concede that the school board would accommodate the mayor’s suggestion.
“Thanks to our supportive citizens, the benefits of an ESPLOST can be seen throughout our community from new schools, furniture, buses and technology to renovated classrooms, auditoriums and athletic facilities that would not otherwise have been possible,” he told the Ledger-Enquirer via email. “The City and School District enjoy a positive, collaborative relationship that I expect to continue as our board discusses future ESPLOST considerations.”
Lewis added, “A discussion regarding a potential future ESPLOST will occur as part of our routine process and timetable in the weeks ahead.”
Board chairwoman Pat Hugley Green of District 1 indicated she wants the ESPLOST renewed.
“The next ESPLOST renewal is critical to continue to meet the many capital and building needs, in the classrooms, new school buses, furniture and equipment, etc.,” she said via email. “MCSD has always worked collaboratively with CCG and that relationship will continue as we focus on meeting and improving the needs of students, families and the community.”
Green’s brother is City Manager Isaiah Hugley.
Board member Mark Cantrell of District 6 told the L-E, “I think the school district should continue the (E)SPLOST, but it all depends on what the city presents and what they’re needing. The school district always needs the money, … but I don’t think the taxpayers, the citizens, are going to vote for two SPLOSTs in one year.”
Board member Cathy Williams of District 7 disagreed, saying the city council and school board are separate taxing authorities and should act that way.
“We should consider our needs for SPLOST referendums independent of each other,” Williams said.
District 2 Councilor Glenn Davis said he hopes the school district understands the urgent need for funds for a new government center without impacting the current tax structure.
“You’ve got a lot of people sitting down there at risk in a building that’s getting worse, that’s costing the taxpayers money — it’s their money too you know, it’s their tax dollars,” Davis said. “I don’t know of any building in the school district that is loaded with life safety issues. Does that not put it a step above from a priority standpoint?”
District 9 at-large councilor Judy Thomas said she didn’t think putting both on the ballot is a good idea.
“If you put an ESPLOST and a SPLOST on there at the same time, that will increase the sales tax to 9%, and they will both fail,” she said.
TSPLOST a concern
District 5 Councilor Charmaine Crabb also mentioned the regional TSPLOST, which expires Dec. 31, 2022.
“We are hoping that SPLOST can be replaced with an ESPLOST, but there are other counties involved in the TSPLOST decision, not just us, and (we) are unsure of the outcome of that situation,” she said.
Even if the school board decided not to pursue another tax and wait until the TSPLOST expires, there is no guarantee another 1% TSPLOST wouldn’t be approved.
For another regional TSPLOST to get on the ballot, a majority of the counties in the 16-county River Valley Region have to pass a resolution in support. All of the counties in the region have passed resolutions in support of another 10-year tax, except Muscogee County, according to Karen Judd, Transportation Investment Act communications specialist for the Georgia Department of Transportation.
Columbus Council voted June 11 declining to support the TSPLOST, but their vote is not enough to keep the process from moving forward and a new regional TSPLOST being put on the ballot.
“The date of the referendum has not yet been determined, but the initiative will go to voters of the RV Region for approval, regardless of any other SPLOST referendums in individual counties,” Judd said in an email. “If the popular vote prevails, all 16 counties will have a second regional TSPLOST, and no individual county can opt out.”
The 16 counties that make up the River Valley Region include Muscogee, Chattahoochee, Marion, Talbot, Harris, Stewart, Webster, Taylor, Schley, Macon, Sumter, Quitman, Clay, Randolph, Dooly and Crisp.
Muscogee has the largest population by far, with 194,160 as of July 1, 2018, according to the U.S. Census Bureau. The populations of the remaining 15 counties added together cap out at 173,000.
While Columbus Council can’t keep the TSPLOST from being put on the ballot, Muscogee citizens could tip the scale.
In 2012, Muscogee citizens voted in favor of the TSPLOST with 13,801 votes to 12,4774 votes, or 53% to 47%.
Muscogee’s votes made up 47.8 % of the votes cast in all 16 counties.
Columbus SPLOST history
▪ 1993: The city’s first SPLOST was approved in 1993. The motivation was the need to fix the combined sewer overflow problem along the Chattahoochee River.
The $142 million raised ($169 million including interest on the bonds) funded projects such as the Chattahoochee Riverwalk to fix the sewer problem, the Columbus Civic Center, a new public safety building, new sidewalks and upgrades to parks and recreation facilities.
▪ 1997: The first ESPLOST in Columbus, approved in 1997 by 79% of the voters, funded projects such as a new high school (Northside), new air conditioners and renovations for school buildings.
The tax was supposed to collect $188 million but produced $140 million during the five-year period. As a result, the school board decided to delay building two new schools: the elementary school that became North Columbus and the middle school that became Veterans Memorial, both funded by the next ESPLOST, approved in 2003.
▪ 1999: The city renewed its SPLOST in 1999. Voters approved a $255 million list of projects, including public safety, economic development, parks and recreation, transportation, roads, stormwater drainage and flood abatement — and $40 million to build the Columbus Public Library, which was a separate question on the ballot.
The new library was a joint project between the city and MCSD, which owns and operates the public libraries in Columbus.
Collections ended in September 2008.
▪ 2003: In the wake of the unfulfilled 1997 promises, the 2003 ESPLOST referendum was approved by only 50.6% of the city’s voters, passing by only 280 votes (11,538 to 11,258). But this time, the tax reached its $148 million goal and, combined with other funding, gave MCSD $180,437,486 to spend on capital projects, such as a new school (Eagle Ridge Academy), a new Rigdon Road Elementary School and a new Mildred L. Terry Public Library.
Money also was set aside for a new MCSD headquarters. That project became controversial when it expanded from the original $12.6 million to about $30 million.
▪ 2009: In 2009, 57% of the city’s voters approved the ESPLOST to fund a $223,155,784 list of projects, including a new Carver High School, a new middle school (Aaron Cohn) and a new elementary school (Dorothy Height).
But the sluggish economy from the Great Recession produced a shortfall of approximately $40 million, prompting the board to cut and defer some projects.
▪ 2012: In 2012, voters in the 16-county River Valley Region, including Muscogee, passed a 10-year SPLOST for transportation purposes, called TSPLOST. This 1% sales tax is estimated to raise nearly $260 million for the county.
▪ 2015: The current ESPLOST, which 54% of the city’s voters approved in 2015, is scheduled to expire June 30, 2020.
The 24 projects amounting to an estimated $192,185,000 include: the new Spencer High School, which opened last year; the Rainey-McCullers School of the Arts, which opened two years ago with funding from the 2003, 2009 and 2015 taxes; and the yet-to-be completed district-wide technology upgrades, district-wide facility needs and a multisport complex for district-wide use.