e-Vents

[ Saturday ]

SPLOST - Taxes Which Never Go Away

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SPLOST - the acronym for Special Purpose Local Option Sales Tax...is an item that communities latched onto years ago. Originally intended to fund special capital projects not covered by general funds provided by federal or state appropriations, local county governments proposed the special tax elections to seek funds for improvements to schools, buildings, roadways, etc.

In Hall County Georgia, located northeast of Atlanta, a SPLOST issue was introduced and passed in a special election in 1985. The original SPLOST was to have a lifespan of 30 months, and provide funding for roads and bridges through a 1 cent sales tax.

In 1988, SPLOST II was introduced and passed with a lifespan of 33 months to provide for various building improvements in the area.

By 1994, SPLOST III was introduced and passed with a lifespan of 60 months. It was to provide funds for improvements to the courthouse, waste treatment projects, etc.

In 1998, SPLOST IV was passed with a lifespan of 60 months. Last year, SPLOST V was introduced and passed with a lifespan of 60 months, and already another SPLOST issue has been introduced for a 2006 referendum. As one might imagine, the proposed projects listed for funding are wide-ranging, and look like much of the pork barrel legislation often passed by Congress and state legislatures.

What began as a well-meaning idea has turned into a regular source of revenue for the local government. Since local government is prohibited by statute from advertising and promoting the special election, it has sought the assistance of the local chamber of commerce...and the chamber has obliged.

Has anyone noticed a trend here? Once the special tax elections are introduced and an issue passes, it never goes away. Is it ridiculous that a one percent sales tax passed in 1985 is still in effect, and has taken on life number five and headed for life number six?

One could debate the economic value of a one percent sales tax, and using a baseline comparing this year with 1985, conclude that the impact on low-income individuals and families is less today than it was in 1985. But the fact is that low-income families have little input in the process, when the chamber of commerce floods the media with advertising prior to the elections, praising the SPLOST and promoting the benefits to the community. They argue that much of the tax is paid by outsiders buying services in the county, through hotel/motel tax collections and automobile purchases. Statistics to validate their argument are rarely presented. And, they never mention the negatives...

And the negatives need to be mentioned. The additional tax imposes a hardship on low income earners, in that it taxes their purchases on clothing, school supplies, groceries, automobiles, prescriptions and medication, household items, and most other goods and services which they purchase. As a percent of their total income, it is a greater burden for them than for the balance of the population.

The idea of the SPLOST has also become a sound bite by the local politicians. When asked by media reporters about the tax, they respond that it is not a 'tax increase...we are simply asking for an extension on something that we are already providing.' 'And what is one cent anyway?', they often reply.

The issue that needs to be disclosed is a simple one. With a combined sales tax rate of 7 percent, this mostly rural county is paying one of the highest sales taxes in the nation. And as the population overflow from Atlanta has increased in this county, a larger base of tax paying residents has increased the revenue inflow from sales tax collections. This occurs even without the increased tax. But governments rarely decrease in size, and have an insatiable appetite for additional forms of revenue in the way of taxes. And we are the ones who pay for it.

Perhaps a new label for SPLOST should be adopted...

Sorry Politicians Love Our Stupid Taxes.

MM [06:00]