Officials in the young cities of Milton and Johns Creek are on the verge of boosting their credit.
The General Assembly passed bills last week that would allow both cities to change wording in their charters that had made it nearly impossible for them to raise tax rates. The new legislation would free up a potential cash flow that would allow them to float bonds or borrow money to resurface streets or make other major improvements.
Like Sandy Springs before them, Johns Creek and Milton capped their property tax rate when they incorporated in 2006. That cap, 4.731 mills, cannot be raised without approval from residents.
But unlike Sandy Springs, both cities used wording in their charters requiring “a majority of all registered voters” to approve a rate hike, meaning voter turnout in a referendum would have to exceed anything either has mustered since they incorporated.
The new language permitted in House Bill 527 for Milton and House Bill 574 for Johns Creek would allow a simple majority vote of the electorate to pass an increase.
“It gives the taxpayers a voice in their city where before they did not have one,” Johns Creek City Councilwoman Bev Miller said. “Certainly, the ability to raise taxes is important in getting a bond rating.”
Neither city is pushing to boost property taxes, but having the flexibility should give the city more access to credit, she said.
Members of citizen charter commissions recommended the wording change after nearly seven months of meetings last year.
While Milton, a pastoral city mostly off the main thoroughfares, has been able to meet most of its needs under its current tax cap, Johns Creek has scrambled to keep up with its crumbling roads, which support some of metro Atlanta’s heaviest commuter traffic.
John Buckett, a Johns Creek resident who served on the commission, said the legislation — which still requires Gov. Nathan Deal’s signature — bodes well for the financial stability of the city.
“We need the informed voters to make a decision on the need for future revenue to stabilize our decaying infrastructure,” Buckett said. “Without this, we faced a very bleak future with virtually no ability to raise monies through rate increase or bonding.”