A House subcommittee will resume work Monday on tax legislation that Clayton County says will cost it $13 million in annual revenue.
The county’s tax commissioner, Terry Baskin, made that assessment — which would amount to about 7.6 percent of the county’s current operating budget of $170.8 million — following a hearing Thursday morning on House Bill 399 before a House Ways and Means subcommittee.
The bill would prohibit the county from collecting taxes from vendors who lease space at Hartsfield-Jackson International Airport, which sits in Clayton.
Although the bill does not actually single out Hartsfield-Jackson, the airport is the only one in Georgia where vendors are assessed ad valorem taxes, which are based on the value of real property, such as a business or land.
Rep. David Knight, a Republican from Griffin who introduced the bill, said the legislation is not an attack on Clayton. But he said county officials have “wrongly misinterpreted” aviation code laws by assuming that it gives them the power to tax vendors.
“Bottom line, they don’t have the right to levy taxes. They’ve wrongly used the language of the aviation code,” Knight said. “This is about the tax code, especially ad valorem taxes. They are (supposed to be) administered fairly across the state. I hate (that) this feels like we’re picking on Clayton County. There’s good folks down there. We’re trying to make sure the tax code is fair.”
Nonetheless, the bill produced a flurry of emails this week among county officials and community groups worried about its impact.
“This is crucial to our community and will cripple our Tax Digest and General Budget,” Rep. Mike Glanton, D-Jonesboro, said in a memo. “This would be devastating to the district at a time when revenues from all sources continue to decline.”
Glanton said the airport brings in billions of dollars in revenue each year, yet Clayton gets what amounts to a “pittance” of that money. The bill’s impact would cut revenue to county schools by $9 million a year, Glanton said.
Baskin said the lost revenue would be “a significant amount of money” to Clayton.
“The county has already gone through a lot of transformation in terms of what we generate in revenues,” he said.
In addition to dealing with the recession, Baskin said the county has lost hundreds of millions of dollars in revenue over the past five years as Delta Air Lines benefited from tax exemptions on jet fuel in 2010 and 2011, and the county ceded the car rental industry to the airport.
Now, Baskin and Glanton said, the prospect of losing revenue from the ad valorem taxes would devastate the county, which has also had to endure a steep rate of foreclosures. Clayton, he said, also is still battling a lingering image problem from its school system losing accreditation in 2008, although it has since regained accreditation.
Knight described himself as “very empathetic to their budget issues.”
“That doesn’t excuse the fact that everyone must follow the law in administering a levy on property tax,” he said.