Georgia voters will do more than cast a ballot for president Tuesday. They also will consider three amendments to the state constitution affecting land use, tax and development policies.
David Hudson, general counsel for the Georgia Press Association, has analyzed the amendments and their effects on local communities.
Amendment 1: Special taxation for forest land conservation tracts
This proposed constitutional amendment would authorize the General Assembly to pass laws creating special ad valorem taxation for “forest land conservation use.”
• To qualify, the tract of forest land must exceed 200 acres.
• In computing value for taxation, the value of standing timber shall be excluded.
• The special treatment would be afforded to any individual or entity who owns such forest land.
• If the “covenant use” of the forest land is breached within 15 years, the county may recapture the tax savings obtained by the property owner.
• If “forest land conservation use” property causes ad valorem taxes to be reduced 3 percent or less for a local government, the legislature is to appropriate an assistance grant to the county of 50 percent of the amount of the reduction. If “forest land conservation use” causes a reduction in ad valorem taxes of more than 3 percent, the state shall give assistance grants of 50 percent of the first 3 percent reduction, and then 100 percent of the remaining reduction in ad valorem taxes.
Analysis: • The amendment would not give relief to small-property owners who have less than 200 acres of forest land. Thus, it may not be of great benefit in curbing “urban sprawl.”
• The amendment would result in a loss of at least 1 percent of ad valorem taxation revenue to a county and its school board. Also, can there be assurance that the General Assembly would appropriate the other funds the amendment calls for?
• The exclusion of standing timber from the property’s valuation would be a great boost to companies engaged in the business of large-scale ownership and development of timber tracts. They argue that they are subject to a “double tax:” ad valorem while the trees are growing and then income when the trees are harvested. Is the economic incentive of this amendment necessary for companies to hold large-scale timber tracts in Georgia?
• Then there is the issue of giving more favorable ad valorem tax treatment to one type of landowner over others.
• Instead of this amendment authorizing the General Assembly to pass laws that would apply statewide, should something like this be structured so that it would be an option for the citizens of each county to vote on in light of the particular needs of that county?
Amendment 2: Use of local school tax funds for redevelopment purposes
In 2008, the Georgia Supreme Court struck down as unconstitutional a bond issue by the Atlanta school system, the proceeds of which were to be used to finance the “Atlanta Beltline Redevelopment Plan.” The Beltline project was to “combine green space, trails, transit and new development along 22 miles of historic rail segments that encircle” the city of Atlanta. The bond issue was challenged because of language in the constitution that requires school taxation to be used exclusively “for the support and maintenance of education.” The Georgia Supreme Court held that the Beltline project did not fall within that definition. Woodham v. City of Atlanta.
This constitutional amendment is to allow local school boards to issue tax allocation bonds to be used for community redevelopment projects. Thus it would allow in the future the types of projects which the Supreme Court held are currently not authorized.
Analysis: • If the constitutional amendment passes, whether to issue such bonds for redevelopment purposes will be a decision made by each school district.
• The ultimate question is whether it is wise to allow local school districts to use revenue taxation for schools for bond projects that are only indirectly related to the welfare of the school system.
Amendment 3: Creation of infrastructure development districts
This amendment would allow the General Assembly to pass laws for the establishment and operation of local infrastructure development districts. These districts would have the power to impose and collect fees and assessments within the district, to incur debt, and to purchase, construct and operate infrastructure. The amendment would also allow the General Assembly to establish how the governing body of such a district would be established.
For such a district to be established, it would have to be approved by the local governments within whose jurisdictions the district would exist.
Analysis: • The ultimate question is whether such a district is needed to establish infrastructure that could not be established and operated by the city and county governments at the locations where any such district would be established. Why is it in the public interest to use such a district rather than have the infrastructure provided by existing government?
• An infrastructure district can target user fees to those property owners where the benefits of the infrastructure will be available. Thus it can allow those who receive the benefits of the infrastructure to be the ones who actually pay for it.
David Hudson, general counsel for the Georgia Press Association, has analyzed the amendments and their effects on local communities.
Amendment 1: Special taxation for forest land conservation tracts
This proposed constitutional amendment would authorize the General Assembly to pass laws creating special ad valorem taxation for “forest land conservation use.”
• To qualify, the tract of forest land must exceed 200 acres.
• In computing value for taxation, the value of standing timber shall be excluded.
• The special treatment would be afforded to any individual or entity who owns such forest land.
• If the “covenant use” of the forest land is breached within 15 years, the county may recapture the tax savings obtained by the property owner.
• If “forest land conservation use” property causes ad valorem taxes to be reduced 3 percent or less for a local government, the legislature is to appropriate an assistance grant to the county of 50 percent of the amount of the reduction. If “forest land conservation use” causes a reduction in ad valorem taxes of more than 3 percent, the state shall give assistance grants of 50 percent of the first 3 percent reduction, and then 100 percent of the remaining reduction in ad valorem taxes.
Analysis: • The amendment would not give relief to small-property owners who have less than 200 acres of forest land. Thus, it may not be of great benefit in curbing “urban sprawl.”
• The amendment would result in a loss of at least 1 percent of ad valorem taxation revenue to a county and its school board. Also, can there be assurance that the General Assembly would appropriate the other funds the amendment calls for?
• The exclusion of standing timber from the property’s valuation would be a great boost to companies engaged in the business of large-scale ownership and development of timber tracts. They argue that they are subject to a “double tax:” ad valorem while the trees are growing and then income when the trees are harvested. Is the economic incentive of this amendment necessary for companies to hold large-scale timber tracts in Georgia?
• Then there is the issue of giving more favorable ad valorem tax treatment to one type of landowner over others.
• Instead of this amendment authorizing the General Assembly to pass laws that would apply statewide, should something like this be structured so that it would be an option for the citizens of each county to vote on in light of the particular needs of that county?
Amendment 2: Use of local school tax funds for redevelopment purposes
In 2008, the Georgia Supreme Court struck down as unconstitutional a bond issue by the Atlanta school system, the proceeds of which were to be used to finance the “Atlanta Beltline Redevelopment Plan.” The Beltline project was to “combine green space, trails, transit and new development along 22 miles of historic rail segments that encircle” the city of Atlanta. The bond issue was challenged because of language in the constitution that requires school taxation to be used exclusively “for the support and maintenance of education.” The Georgia Supreme Court held that the Beltline project did not fall within that definition. Woodham v. City of Atlanta.
This constitutional amendment is to allow local school boards to issue tax allocation bonds to be used for community redevelopment projects. Thus it would allow in the future the types of projects which the Supreme Court held are currently not authorized.
Analysis: • If the constitutional amendment passes, whether to issue such bonds for redevelopment purposes will be a decision made by each school district.
• The ultimate question is whether it is wise to allow local school districts to use revenue taxation for schools for bond projects that are only indirectly related to the welfare of the school system.
Amendment 3: Creation of infrastructure development districts
This amendment would allow the General Assembly to pass laws for the establishment and operation of local infrastructure development districts. These districts would have the power to impose and collect fees and assessments within the district, to incur debt, and to purchase, construct and operate infrastructure. The amendment would also allow the General Assembly to establish how the governing body of such a district would be established.
For such a district to be established, it would have to be approved by the local governments within whose jurisdictions the district would exist.
Analysis: • The ultimate question is whether such a district is needed to establish infrastructure that could not be established and operated by the city and county governments at the locations where any such district would be established. Why is it in the public interest to use such a district rather than have the infrastructure provided by existing government?
• An infrastructure district can target user fees to those property owners where the benefits of the infrastructure will be available. Thus it can allow those who receive the benefits of the infrastructure to be the ones who actually pay for it.