Georgia voters are presented this election season with three proposed amendments to the state constitution; each propose changes to various tax programs. These amendments were placed on the ballot due to a constitutional majority, 2/3rds vote by the State Senate and the House. Following is a breakdown of each proposed amendment, detailing what voters need to know to make an informed decision.
Amendment 1: “Shall the Constitution of Georgia be amended so as to provide that the General Assembly by general law shall encourage the preservation, conservation, and protection of the state’s forests through the special assessment and taxation of certain forest lands and assistance grants to local government?”
To encourage the preservation of Georgia’s forests, this voluntary tax program would provide forest land protection incentives for large, contiguous tracts of 200 acres or more that are ineligible for the existing CUVA (Conservation Use Valuation Assessment) program. This statute creates a property valuation classification of forest land, which has no acreage cap and allows all property owners, including businesses, to contract their property with state and receive the tax benefits.
By participating in this program, the landowner agrees to utilize the land for conservation purposes for at least 15 years. Other stipulations include:
- The promotion, preservation, or management of wildlife habitat;
· Carbon sequestration in accordance with the Georgia Carbon Sequestration Registry;
· Mitigation and conservation banking that results in restoration or conservation of wetlands and other natural resources; or
· The production and maintenance of ecosystem products and services such as, but not limited to, clean air and water. (Section 2, Line 16-22. HB 1211)
· In return for agreeing to keep the land in a complying use, landowners receive a lower property tax rate on their forest property.
· If this amendment causes the total county tax digest of revenue to be reduced by 3 percent or less, the State of Georgia will reimburse the county for half the lost revenue. Lost revenue in excess of 3 percent will be totally reimbursed by the State.
· Places a 3 percent cap on annual revaluation of properties in the program.
· Provides permanent protection to large, contiguous tracts of forest land in order to sustain Georgia’s clean water, clean air, and wildlife habitat.
· Ensures availability of timber to continue to fuel Georgia’s traditional forest industry as well as emerging markets such as bioenergy.
Amendment 2: “Shall the Constitution of Georgia be amended so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use tax funds for redevelopment purposes and programs?”
This amendment asks voters if they want to allow a portion of their school property taxes to be used for financing redevelopment projects throughout the state. The need for a constitutional change comes as a direct response to a state Supreme Court ruling in February that made it unlawful for tax allocation districts (TAD) to use educational funds for development projects.
Here’s a breakdown of how TADs work:
- A TAD is a source of funding for redevelopment projects, typically focused on urban areas in need of an economic boost.
- The property taxes within a TAD are frozen when the district is designated. Once property taxes rise above the base tax, due to increases in the value of property, the difference is collected and used to pay for the project.
- All TADs have a time limit. Typically, TADs last for about 25-30 years, depending on the life of the bond and the district.
- Under the proposed amendment, school boards will have the option of contributing money to a project; they are not required to participate.
If passed, the referendum will simply restore the power of local school districts to contribute to TADs. When the session convenes in January, legislators will revisit the existing TAD language and adjust it to clearly reflect the intention of the Constitutional Amendment.
The Supreme Court ruling came about because of the Atlanta Beltline project, a 22 mile redevelopment in metro Atlanta that combines greenspace, trails, transit and new development. The court ruled that the Atlanta School System could not use its future tax money to fund the project. The ruling only affected those TADs that had not yet secured bonds. If the Amendment is approved, the Beltline project will be back underway, including several other existing TADs that have been stalled.
If TADs are unable to access educational funds, they must rely solely on city or county taxes, which in most cases do not generate enough revenue to finance a redevelopment project. If a TAD does not have enough funding to draw from, they are rendered ineffective.
Amendment 3: “Shall the Constitution of Georgia be amended so as to authorize the General Assembly to provide by general law for the creation and comprehensive regulation of infrastructure development districts for the provision of infrastructure as authorized by local governments?”
The statute allows Georgia to create Infrastructure Developing Districts (IDDs.) An IDD is an independent, special purpose district with the authority to sell tax-exempt bonds to finance public infrastructure.
Following is a breakdown of IDDs:
- IDDs exist in seventeen other states, including Florida;
- IDDs fund infrastructure improvements such as roads, bridges, schools, parks, water, sewer and power lines in undeveloped or rural areas;
- Only new residents/homeowners of the community will pay for the additional infrastructure required to support the economic growth.
- Landowners of an IDD, acting through their board, agree to a certain level of fees or assessments to pay for the needed infrastructure, and then will issue bonds to pay for those capital improvements.
- The consent of all landowners in a proposed IDD is required for the establishment of any IDD. In addition, all affiliated local governing authorities must approve the creation of an IDD by local ordinance or resolution. A local government may refuse to approve an IDD for any reason.
- Any infrastructure must be built within local standards and specifications.
- IDDs cannot be formed without local government approval.
- IDDs have higher environmental standards, including safeguards for land, water, and air quality. The districts have an unprecedented 20% green space requirement. They protect the water supply by utilizing quality wastewater treatment plants and by totally prohibiting the use of septic tanks in the district.