Columbus sales tax could rise to 10%!!! (credit rating, school district, property taxes)

[Fountain-of-youth]

Mayor Skip Henderson said Wednesday that Columbus Council will be forced to “actively campaign against” continuation of a sales tax that funds regional transportation and road projects, should it jeopardize funding for the new government center.

In order to keep the transportation tax from competing head-to-head with a new local sales tax set to appear on the ballot for Muscogee voters next fall, Henderson asked leaders from 15 neighboring counties to consider delaying a vote until 2021 or 2022.

The region has the option to put the transportation tax on the ballot in 2020, and again in 2022, should it fail.

Henderson made the comments Wednesday morning during a meeting of the River Valley Regional Transportation Roundtable. He said Muscogee County has an “overwhelming critical need” to replace the government center, which will cost anywhere from $100 million to $150 million.

To do that, council will ask voters to approve a 1% sales tax as opposed to issuing debt, the financial burden of which would fall on property owners.

Henderson said when the transportation tax (called a transportation special purpose local option sales tax or TSPLOST) was first brought to voters in 2012, Columbus Council did not campaign for or against it. Muscogee citizens passed the tax by a slim margin of 53% to 47%.

“Frankly, that’s the perspective we would take again if this were on the 2022 ballot,” he said.

But if it ends up head-to-head on the 2020 ballot with the county’s local tax (called special purpose local option sales tax or SPLOST), it would put the council in an “awkward position” to “actively campaign against the TSPLOST,” Henderson said.

“We think the TSPLOST has been a valuable tool, we know what it means specifically to the counties in our region...but at this particular point in time we have some other critical needs,” Henderson said. “Our hope is that if (the TSPLOST) stays on a ballot for 2021 or 2022, then it stands on its own.”

Muscogee County currently has an 8% sales tax, broken down as follows:

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.

The timing for the SPLOST vote is contentious with more than just the TSPLOST.

Since the school district’s tax expires at the end of 2020, Henderson said the council’s intention is to go after a SPLOST and start collections in 2021, keeping the sales tax at 8%.

The school system, however, has never passed up a chance to put an ESPLOST on the ballot, and voters have always passed and renewed the tax each of the four times it’s been on the ballot, since 1997.

And Henderson asserted the school district is already putting together a “task force” to do that again.

“So what we would be facing would be asking our voters to enact a 9-cent total sales tax, if in fact TSPLOST was successful and ESPLOST was successful and our SPLOST was successful,” Henderson said. “We did not think from a sensitivity standpoint that was going to fly this year.”

The Muscogee County Board of Education has not taken any official action toward an ESPLOST, and Mercedes Parham, director of communications for the Muscogee County School District, said Wednesday that she could not speak to any intentions for a task force to be created.

Wednesday’s meeting in Marion County was the first held since 15 of the 16 counties in the region passed resolutions in favor of continuing the TSPLOST.

Columbus Council was the lone government entity to issue a resolution opposing it, but majority wins so the process of bringing the sales tax before voters has been initiated.

The regional roundtable will decide on a list of projects that would be funded by the TSPLOST and work to call for an election. If a referendum was placed on the ballot and more than half of the votes cast in the region were in favor of the TSPLOST, it would be approved and no single county could opt out.

To date, the current tax has generated $300 million in transportation funding for the region and $276.7 million for Muscogee County.

Editor’s Note: A previous version of this story reported the incorrect total amount of tax revenue generated so far that is allocated to Muscogee County. The correct amount is $277 million.


This is horrible for the city.
https://www.ledger-enquirer.com/news...234702027.html

[JayHey]

The highest possible in the above scenario is 9%, not 10%.

4% state tax
1% LOST
1% OLOST
1% ESPLOST
1% TSPLOST

is what we currently have, with the need to add a

1% SPLOST

That's one percent higher than the current 8%.

I don't think that would be horrible for the city, but it is a SPLOST perfect storm and as a community we have to decide which of the three we value most.

TSPLOST has been big for our region and many of the transpo projects we discuss here wouldn't have happened without it.

ESPLOST is critical for MCSD and reducing the revenue rate for our schools sounds like a step backwards.

However without the SPLOST, the city won't be able to move forward with the government center project.

So, looking at that list - TSPLOST is the one I would pick to eliminate, hopefully for just a couple of years. I would easily be sold on a 1% increase in sales tax - though I understand many would be upset by the prospect.

[Hedgehog23]

Sort of a random question here, but what would be the consequences of a majority of voters voting against approving and/or extending any SPLOST proposals that may be on the ballot this fall? How detrimental would it be to the city? Does anyone know what the city's plan B for the government center would be?

[JayHey]

The Education SPLOST is used to pay mostly for capital improvements for the district.

Replacements for ageing busses, new HVAC or kitchen equipment, renovations to existing schools, and even new schools. Spencer's new building was paid for with the ESPLOST, pretty much all of the new schools over the last 20+ years were paid for with money from ESPLOSTs.

The Transportation SPLOST is used to pay for transportation projects across the 16-county region.

The bulk of the money is used to fund specific projects, stuff like road widening, new bridges, even the recent Riverwalk additions were made possible through these funds. In addition a smaller portion of the money is given directly to the counties to be explicitly used for transportation, it's an important piece of the budget for roadway improvements (resurfacing, pothole repair, dirt road regrading, etc.) in our region's counties. This link shows which projects have been made possible with the TSPLOST.

As for the City's Plan B if the newly proposed SPLOST fails to pass, the government center has to have a major capital investment and that money has to come from somewhere.

Failing a penny sales tax to help fund it and knowing that the city budget is already stretched to a fairly sheer veneer, a greater amount of debt would have to be accrued in the form of municipal bonds. Those municipal bonds are going to be issued either way to pay for the project, but the proposed SPLOST is how the city would more manageably pay that debt. Without it the debt would carry for a significantly longer amount of time, meaning the project costs more and putting the city's fairly superb credit rating at risk of a downgrade (which would make all future city-funded projects costs more). Consider this SPLOST as a means to "pay now" for the project as opposed to paying later with the added expense of the longer carried debt and the loss dollar value due to inflation.

[Hedgehog23]

Originally Posted by JayHey

The Education SPLOST is used to pay mostly for capital improvements for the district.

Replacements for ageing busses, new HVAC or kitchen equipment, renovations to existing schools, and even new schools. Spencer's new building was paid for with the ESPLOST, pretty much all of the new schools over the last 20+ years were paid for with money from ESPLOSTs.

The Transportation SPLOST is used to pay for transportation projects across the 16-county region.

The bulk of the money is used to fund specific projects, stuff like road widening, new bridges, even the recent Riverwalk additions were made possible through these funds. In addition a smaller portion of the money is given directly to the counties to be explicitly used for transportation, it's an important piece of the budget for roadway improvements (resurfacing, pothole repair, dirt road regrading, etc.) in our region's counties. This link shows which projects have been made possible with the TSPLOST.

As for the City's Plan B if the newly proposed SPLOST fails to pass, the government center has to have a major capital investment and that money has to come from somewhere.

Failing a penny sales tax to help fund it and knowing that the city budget is already stretched to a fairly sheer veneer, a greater amount of debt would have to be accrued in the form of municipal bonds. Those municipal bonds are going to be issued either way to pay for the project, but the proposed SPLOST is how the city would more manageably pay that debt. Without it the debt would carry for a significantly longer amount of time, meaning the project costs more and putting the city's fairly superb credit rating at risk of a downgrade (which would make all future city-funded projects costs more). Consider this SPLOST as a means to "pay now" for the project as opposed to paying later with the added expense of the longer carried debt and the loss dollar value due to inflation.

JayHey, thanks for the thorough explanation. Your post is very informative.

[columbusboy8]

https://www.ledger-enquirer.com/news...234749547.html

A big investment in our community for all of our citizens! A penny on a dollar! Money well spent!!