2016 SPLOST--All but a General Sales Tax without the Benefits of Being One

The proposal for another Special Local Option Sales Tax (SPLOST) continues the fairy tale that the tax is indeed an option. In the effort to convince ourselves that Cobb is basically a 5% sales tax county with a temporary supplement, we have allowed the SPLOST to morph into something that is far different from what it was intended. Simultaneously the public is being misled into believing that this is the best way to manage public expenditures.

Equally misguided is the belief that the County can forego the SPLOST and still provide all essential public services, particularly maintenance of highway infrastructure, at the same high level we have come to expect. Nothing could be farther from the truth. When Cobb was a thinly populated county, highway and road projects could be funded through revenue generated from property taxes. This is no longer the case. With a highway grid of more than 2500 miles, Cobb County is at a point that maintenance of the system requires a steady stream of annual projects to achieve the high quality of roads that are needed to keep drivers safe and vehicles moving.

Exposing this critical economic component to the uncertainty of the SPLOST vote disguises the reality that one way or another this transportation matrix has to be funded. If we try to move the annual obligations of roughly $50 million in transportation projects from the SPLOST over to the County’s general fund, the outcome is robbing Peter to pay Paul. Either we would have to impose our own form of sequestration by cutting County programs to meet this bill, raise property taxes by as much as 2 mils, or do a mixture of both. Raising property taxes would defeat the original purpose of the SPLOST which was to bring some relief to homeowners’ millage rates by spreading the tax burden among the general public.

By our overreliance on SPLOST to fund highway and public safety needs, we have backed ourselves into the corner of masking the tax from what it is about to become—a general sales tax but without the inherent flexibility of such a tax. For example, passing a 1% general sales tax in 2011instead of the SPLOST could have gone a long way toward funding new and needed police officers; added inspectors to enforce zoning ordinances; restored library hours; acquired green space authorized under the 2008 parks bond; and still funded the majority of the SPLOST transportation projects. The SPLOST can only fund the transportation projects.

Since the money associated with SPLOST programs are fenced off from having to compete with other emerging priorities, a tax increase is almost certain if some unforeseen circumstance emerges. For example, in 2011, despite a SPLOST being recently passed by the voters, the Board of Commissioners subsequently raised millage rates to offset a decrease in the receipt of property taxes during the economic downturn. The nature of a general sales tax could have provided the resources to forego the property tax raise, an option not available with the SPLOST.

The nature of funding the SPLOST and dividing the projects into multiple tiers has opened SPLOST to all kinds of gamesmanship. The $750 million dollars that will be collected in the proposed SPLOST reasonably opens up the question of what programs are needed versus what are nice to have. What emerges are creative justifications to meet SPLOST guidelines, a sure fire recipe for waste, fraud, and abuse. Additionally, voters are asked to judge SPLOST projects primarily on local benefits without regard to any other consideration. This manner of selection is an all-or-nothing Hobsonian choice of voting for badly needed street repaving or not. Good politics, bad governance.

The current SPLOST doesn’t expire until the end of 2015. I would recommend voting against the proposed SPLOST and using the remaining year on the current SPLOST to take a fresh look at County requirements and how to fund them. By prioritizing future needs against the County Strategic Plan, I am confident that a more fiscally conservative plan would emerge and certainly one that better manages expenditures from the public treasury.