Supporters say new tax districts could boost economy

Whitfield County residents may have heard by now that in the November election they’ll vote on whether to allow local governments to create tax allocation districts (TADs). But they might be surprised to get into the voting booth and find the phrase “tax allocation districts” is nowhere on the ballot.

“The wording of the referendum is confusing and people may not even know what it is about,” said Greater Dalton Chamber of Commerce President Brian Anderson.

The referendum — which will be on the ballot in the Whitfield County special election as well as on the municipal ballots in Dalton, Tunnel Hill and Varnell — asks voters whether the county or city should be allowed “to exercise redevelopment powers under the ‘redevelopment powers law’ as it may be amended from time to time.”

Put simply, the measure asks whether those governments should be allowed to create TADs.

TADs are based on the idea that development in an area will increase property values and retail sales. So local governments reserve the extra revenue they expect to get from any development to pay for infrastructure, land, buildings, public artwork or other amenities to attract a developer or developers to that area. That “extra” money does not go into general revenue.

Anderson said TADs can speed up development in an area by allowing local governments to pay the upfront costs off with projected revenue from the development. Officials said that if some property owners in any area don’t want to be included in a TAD, the plan can be drawn to exclude them.

Local governments can spend TAD money as it comes in, but they usually float bonds based on what they expect to receive in extra taxes. Those bonds are not general obligation bonds.

If voters choose to give local governments that power, then the cities and county will designate an agency to create a redevelopment plan that will designate areas where the TADs will be used. The school boards would have to agree to that plan since school taxes would be affected.

After posting two notices and holding a public meeting, local governments could vote to approve the plan.

Residents would not get to vote on the plan. Nor would they get to vote on any bonds that might be issued to finance projects in a TAD.

Dalton-Whitfield Joint Development Authority Executive Director Elyse Cochran says TADs are structured so neither a city nor county nor any redevelopment agency guarantees any bonds.

“The private developer secures the bonds. If he or she bankrupts, the bond holders are left holding the bag — not the community,” said Cochran.

How would TADs affect the local school systems?

Because the city school system operates under from the city of Dalton’s chater, the city school system cannot opt out of the TADs, said Cochran.

“The county school system, because it is a separate taxing authority, can opt out of participating in the TAD and would immediately begin receiving new, increased taxes following the redevelopment of the property contained in the TAD,” she said.

A TAD typically exists for 25 to 30 years, depending on the life of the bonds.

TADs and a similar measure called tax increment financing districts (TIFs) are development tools popular with local governments across the nation. They have been used for 59 years and are currently legal in 49 states. Arizona is the lone holdout.

Anderson said there are currently more than 30 TADs in Georgia, including in Atlanta, Acworth and Rome.

But critics call them a form of corporate welfare that direct tax money to politically favored developers. And some states, particularly Illinois, are looking at restricting their scope.

But supporters say that if used wisely they can help redevelop blighted areas and bring new business, especially new retail ventures to areas that need them.

“We’ve got several areas in Dalton and Whitfield County where it would be beneficial to have (TADs),” said Dana Holsomback, treasurer of a group called Citizens for Jobs, which supports the TAD measures. Members of the group are alumni of Leadership Dalton Whitfield.

Holsomback said she didn’t want to say which areas because it would be up to local governments to designate those areas.

“But it would have to be areas they designate as blighted. If we could redevelop those areas, and bring in some new, large retailers, it benefits us,” she said. “Remember, the money raised in those districts stays there, and it’s the businesses that go in there, not local governments, that are responsible for repaying any bonds that are issued.”

Holsomback said Citizens for Jobs has a two-part agenda, to explain what the “redevelopment powers” referendums are about and to explain to voters why TADs would be beneficial.

“We’ll be visiting a lot of local civic groups such as Kiwanis and Rotary, the League of Women Voters, and hopefully SHRM, the Society for Human Resource Managers,” she said. “We want to talk to anybody who could help us get this measure passed.”

To contact the group or to find out more about TADs, go to www.redevelopmentpowers.com.

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