Cities in Gwinnett County have become increasingly reliant on sales tax pennies to fund core government services, such as paving roads, creating parks and constructing sidewalks, libraries, community centers and other government buildings.
Critics say city and county governments have grown too dependent on the money and that there is huge potential for abuse; government officials say that, without it, they could not provide the level of services that residents expect.
The state’s second-largest county has 15 cities that have received more than $200 million from the 2005 and 2009 special purpose local option sales tax collections.
And the stakes will again be high Nov. 5, when voters consider a SPLOST renewal that is forecast to generate up to $781 million over five years.
Once voters have approved a SPLOST, Gwinnett cities have typically received about 20 percent of the tax revenue, after any projects with countywide benefit are taken off the top. Each city negotiates individually with the county for its share of the proceeds, but the split is largely based on population. Those agreements are expected to be finalized in August.
“SPLOST is now for everybody,” said Johnny Crist, the mayor of Lilburn — a city with 12,000 residents that has received more than $12 million from the two most recent sales tax initiatives.
Gwinnett cities aren’t the only local municipal governments that have come to depend on SPLOST cash.
Gainesville’s 2004 SPLOST allowed the Hall County city to build its $28 million public safety facility, a project dubbed by Chief Financial Officer Melody Marlowe as “more of a necessity” than a luxury to build.
The facility houses the Municipal Court, the police station and the Fire Department, she said. Gainesville voters renewed the SPLOST in March 2009, expecting to generate about $240 million for other projects.
Cobb County residents narrowly approved a SPLOST in 2011, netting Marietta about $45 million. That money helped build roads and fund other transportation projects, said Jim Wilgus, Marietta’s city engineer. Wilgus said that $3.6 million is being used to buy a new fire engine and to build a new fire station.
“For Marietta, it’s very important,” he said. “It keeps our other taxes down.”
This year’s vote will be a test. Gwinnett’s is the first county government sales tax initiative to face voters since last summer’s statewide transportation SPLOST suffered a resounding defeat, particularly in Gwinnett where 71 percent of voters rejected it.
Commissioners have said they expect up to 75 percent of the new SPLOST revenue to be spent on transportation projects.
In addition, an Atlanta Journal-Constitution poll found voter mistrust of government played a significant role in the statewide vote.
That issue is acute in Gwinnett, where a special purpose grand jury criticized former commissioners for overpaying influential developers for parkland — purchases that were made with SPLOST dollars. In addition, a former commissioner is in prison for accepting bribes, and a second commissioner awaits trial on a bribery indictment that involved buying parkland.
“We’re concerned with the way SPLOST is spent,” said Jim Regan, the treasurer for the nonprofit Citizens for a Better Gwinnett. “It was the source of revenue for all those parkland purchases. Once they did that, and demonstrated how much power they have over the money, we became very concerned.
“It’s just highly susceptible to misuse.”
City officials remain confident that voters will approve the renewal, saying the best advertisement for keeping the tax can be seen from one end of the county to the other — a new public works facility in Norcross, a new City Hall and outdoor amphitheater in Sugar Hill, a bridge repair in Duluth, a renovated police station in Suwanee.
“I don’t have a reason to worry about it,” said John Cheek, director of finance for Loganville, which built its Destination Park with SPLOST money. “It’s not like we don’t need the roads repaved.”
Norcross City Manager Rudolph Smith said his city’s $3.1 million public works building couldn’t have been built within the confines of the city’s normal budget. The city of 15,000 is expected to receive a total of $5.8 million from the 2009 SPLOST once collections end in March.
“Every city has benefited,” said Bob Hail, the city manager in Sugar Hill. “Not the government but … the residents.
SPLOST funds account for 38 percent of Suwanee’s five-year, $18.7 million capital improvement plan — or about $7.1 million.
Critics say part of the problem with SPLOST is that the windfalls are so huge that they allow county and city governments to spend lavishly on new facilities and pay for core functions like road paving from the sales tax proceeds instead of the usual funding source — property taxes.
“There’s no doubt that municipalities are hooked on these funds,” said David Hancock, a software engineer from Suwanee who ran an unsuccessful campaign for the state House in 2008. “Moving obvious government tasks essentially off budget … is just wrong. Here is what I could support: have government remove transportation from its budget and reduce taxes by that amount. Then put that money on a SPLOST referendum.
“But they would rather keep the tax rate the same and just offload some of the (expenses) to a SPLOST.”
Crist said Lilburn plans to use its new SPLOST money, if it is approved by voters, primarily on police cars and road paving.
“These are strategic investments to the overall vision of the city,” Crist said. When asked what the city did before SPLOST funds were shared by the county, Crist said: “We were strapped for cash and you just didn’t see the types of projects we have in place now.”
Gwinnett voters have historically supported the tax. One SPLOST has been voted down since 1985 — the 1996 initiative that would have been totally dedicated to transportation. Voters promptly approved a new SPLOST the following year, after it was broadened to include parks and public safety.
The 2009 SPLOST passed with 56 percent of the vote.
The tax initiatives have faced close calls elsewhere. The 2011 Cobb County SPLOST, for example, passed by a slim 739 votes.
But many of the SPLOST projects remain popular with residents.
Paul Carpenter, a 52-year-old Suwanee resident, was eating lunch earlier this week in Thrasher Park — a $716,000 facility paid for with SPLOST funds.
“I’d vote for it,” Carpenter said of the renewal this fall. “I use the parks and libraries pretty regularly. The money has to come from somewhere.”
SPLOST allocation to the cities will be complicated this year by the recent creation of Peachtree Corners, which instantly became the county’s largest city with about 34,000 residents.
Gwinnett Commission Chairwoman Charlotte Nash said the overall SPLOST allocation to cities might increase as a result of Peachtree Corners.
“Bottom line, we have to find an allocation method that … all the parties can accept as reasonable,” Nash said.