Mike Babb: SPLOST is closest thing to fair tax

Published 2:35 am Sunday, July 31, 2011

On behalf of the Board of Commissioners I wish to address some of the points raised in the guest column of Mayor David Pennington published Wednesday, entitled “SPLOST pennies hurt local economy.”

The commissioners recognize that there is no such thing as a “good tax” but it is felt that the penny sales tax in a SPLOST (Special Purpose Local Option Sales Tax) is the closest thing to a “fair tax” since anyone making a purchase pays it as opposed to the property tax bill that is mailed only to owners of property.

Since our community has a very good per capita collection of sales tax it allows expensive projects to be paid off quickly. The single best thing about the SPLOST is that the citizens themselves can judge the need of the projects and vote for or against collecting the penny.  Citizens do not have that opportunity with a property tax.

The mayor states that the penny (1 percent) tax hurts our local carpet industry by adding hundreds of thousands of dollars of additional costs each year to energy purchases. This is a somewhat one-sided viewpoint since the city of Dalton treasury collects up to a 6 percent fee from the gross revenues of Dalton Utilities.  This collection amounted to some $9 million last year.  

The mayor expresses concern for the effect taxes have on the local economy and the people living here but has stated in his re-election plans that he hopes to move $4 million of Local Option Sales Tax (LOST) collections from the county treasury revenue stream and put it in the city treasury revenue stream to help eliminate city taxes. This amount is 10 percent of the county’s budget and its elimination would take nearly 2 mills of property tax to replace. As the city residents know, everybody pays county property taxes.  

The column also questions any new SPLOST dollars for road projects and asks why not use the $8 million left over from a prior SPLOST? The previous and present board of commissioners have been very open in their use of the $8 million left from the water project to keep service levels up without any tax increases in a time of declining revenues. Also questioned is the $36 million left in the bank from the most recent SPLOST and why it is not used for transportation needs. The answer is that there will be an increase in the spending of the funds and the expansion of transportation work now that the design, engineering, environmental, and right of way purchases are being completed on projects. The county has more safety-related transportation projects designed than the present $36 million will pay for.

The commissioners are in complete agreement with the statement that the best way to keep from raising property taxes is to control spending.  Presently Whitfield County M&O millage ranking (adjusted for tax districts and fire fees) is the third lowest in the state. The commissioners recognize that the sales tax (LOST) rollback plays a large factor in the low millage rate. Due to this, the commissioners also compare Whitfield County spending on a per capita basis with counties of similar economic ranking. As compared to similar counties (Douglas, Paulding, Loundes, Carroll) Whitfield County spending is $60 less per capita than the five-county average. In other words, Whitfield County spending is $6 million less than the average spending of the five similar counties (Economic Rankings Nos. 21 through 25).

The column compares the spending of the four Whitfield County taxing authorities from 2007 to 2010 which accurately shows the city government with the only decrease in spending. By starting with 2007, however, it somewhat distorts the true picture of what the county has done. It was in 2008 that the previous board addressed safety/staffing needs of the county fire department, addressed other professional needs, and gave a significant 5 percent pay increase to the county employees. In 2008 the previous board of commissioners also reached an agreement with the city to maintain all roads, streets, and bridges allowing the city to eliminate approximately 30 city public works positions. This allowed sizeable savings to the city but at the same time increased pressure on the county budget and work schedules. This agreement in 2011 will result in the transfer of somewhere over $1.3 million in cash and in-kind service to the city of Dalton. This agreement along with other moves such as the county taking over all building inspections contributes to the city’s ability to cut spending while not cutting service.

If you start with the 2008 budget and move forward to 2010 you find that total Whitfield County spending has been cut by 5.62 percent. If you compare only the budget under direct board of commissioner control (no constitutional officers budgets), this reduction is $4.2 million or 13.4 percent since 2008. The county employees have not had a raise since 2008, they are being furloughed for four days this year, and the county accepted a lower cost insurance provider which is not accepted locally resulting in many covered employees leaving Dalton and Hamilton Medical Center for treatment elsewhere. Given just this you might understand the distress of the commissioners at the implication of the mayor’s column that the county was not cutting costs therefore should not be considering a SPLOST.

The offer to work together to provide recreation for all of Whitfield County has been reviewed by the county. There are two issues to overcome. The county recreation program is heavily volunteer oriented and community based. The commissioners were informed that there was wide concern about losing community identity in a combined department. There is also the concern about the costs involved since the city of Dalton per capita cost for parks and recreation is $90 as compared to the county per capita cost of $14.  Even if the county program was completely eliminated and everyone went to the city programs the per capita cost would be $30 as compared to the present $14 for the county.  These are some of the issues that the established Merger Committee will need to address.

The commissioners are in complete agreement with the mayor in his belief that there are no more important qualities of life for individuals than jobs.  It is this belief that has led the commissioners to add debt to the county budget to pay Dalton Utilities for sewer expansion, to pay for the Carbondale Business Park development, and provide incentives to help bring and keep jobs in our community. These actions have put a stress on the county budget but the commissioners believe the payoff in jobs and tax base will prove to have been worth the stress.  

Over the next 25 days the citizens have the opportunity to talk to their elected officials and to evaluate the areas that the SPLOST dollars would address. The commissioners welcome all comments and discussions. At the end of the 25 days, the commissioners will make the final decision to place or not place on the ballot and if so, how long to collect the penny.  

If it is put on the ballot it is then the decision of the voters to accept or reject and that is the single best thing about a SPLOST.

Mike Babb is chairman of the Whitfield County Board of Commissioners.