Fractional SPLOST Means Tax Relief, Smaller & More Accountable Government – By Joel Aaron Foster

Jan 17, 2014 by AFP
Tax Cuts for Liberty

Tax Cuts

Imagine you need to book a flight to New York that runs $550 roundtrip but the airline is restricted from selling you a ticket for less than $750. They are forced to add other charges – mandatory in flight movies fees, charges for peanuts, soda, boarding pass printing fees and other slush services just to bump the price up to the required amount. What a waste!

Current Georgia law works much the same way by allowing each county to propose a Special Purpose Local Option Sales Tax of one cent to voters in order to fund capital projects within the county. The tax usually lasts five or six years. Too often, however, such project lists become bloated with unnecessary taxpayer waste and are wide open to abuse. Why? Because SPLOST are currently required to be one percent without providing any county level flexibility for proposing a lower rate. If local taxpayers want to fund a specific road improvement project and the project bid costs less than what a one cent tax would raise, the county cannot structure a deal that raises only the amount of money needed to fund the project. This translates into unnecessary projects added to lists, a tendency to grow lists exponentially to obfuscate waste and, in some egregious cases, provide for pet projects funded by taxpayer largesse.

In 2013, State Representative John Carson (R-46) introduce HB 153 that allows county level flexibility to propose SPLOST that raise less than a one cent tax, a fractional-percentage SPLOST. State Senator Judson Hill (R-32) introduced similar legislation (SB 99) that passed through the Senate. The legislation represents a huge opportunity for local taxpayers, undercutting the temptation to grow government by proposing filler projects while providing more government transparency. It also mitigates the unintended consequences associated with a never-ending vortex of public spending from a county’s general fund on additional maintenance costs years down the road. These expenses create pressure to impose additional taxes or divert existing funds from more important government obligations.

Local organizations like the Georgia Municipal Association have pushed back hard against the idea, suggesting a fear in early 2013 that the flexibility of a fractional SPLOST would cause them to have “…less revenue that they are due.” Aside from a government entitlement mentality, there’s the faulty mechanics behind their opposition. County level projects tend to revolve around “meat and potatoes” – road improvement, water and sewer – whereas local cities are more interested in the outside garnishments – parks, landscapes, street lights and the like. These concerns, however, showcase a set of misplaced priorities toward the proper role of government. Local taxpayers should come first and not government pet projects. A fractional SPLOST option will go a long way to protecting taxpayer interests while providing for local government that prioritizes more efficiently where Georgians keep more of their hard earned money.