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Health & Fitness

Property Tax Increase? ... Or Much Ado About Nothing?

City opponents claim a Yes vote on November 8th is a vote for a tax increase ... the numbers say otherwise.

As we are rapidly approaching the big cityhood vote on November 8th the rhetoric against incorporating has seemingly began to focus more and more on the financial aspect of what a new city would cost local residents. 

The main opposition group, Peachtree Corners Ballot Committee, has focused a lot of their rationale to being against the city on the basis that the proposed charter of the new city allows for a property tax increase of up to one millage point (about $40 for every $100k of house value). Let’s examine in a little detail the expenses and revenues for a proposed city to determine if a property tax would even be necessary. 

Both sides of this debate have regularly referenced the feasibility study done by the Vinson Institute of Government.  The feasibility study is meant to determine if the new city could reasonably support itself using the powers granted it within the proposed charter. 

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The feasibility study estimates that it would cost around $780,000 per year to run a new city.  This calculation is based on examining cities of similar size in addition to looking at what services our new city would provide.  The study estimates that we would need a handful of regular full time employees and that most services, such as code enforcement, could probably be contracted out. 

I have discussed in previous articles that the feasibility study estimates that a new city would bring in about $2 million in property tax revenue IF the millage rate was raised by the maximum one millage point and that we would also bring in about $1 million in franchise fees.  

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Let’s talk about franchise fees for a minute. Currently all of us are already paying franchise fees for a variety of things such as cable, power, etc.  Let me repeat…. we are ALREADY paying these fees. The only increase we would be facing would be a 2% increase in our power bills. 

Now here is the part that is interesting. At a recent HOA meeting former State Senator Dan Weber (Dunwoody) was explaining that Dunwoody, with a population of 46,000 and a very similar economic profile to what Peachtree Corners has, raised about $3.1 million in franchise fees this past year.

It would seem that the $1 million estimate for franchise fees for Peachtree Corners would probably be a bit low considering that our city is going to have about 38,000 people. A number around $2 million would seem more logical and Senator Weber said as much during some of his comments. 

So let’s stop for a minute and examine where we are. The study estimates costs at $780,000. Based on comparisons with Dunwoody it is within reason that we could easily bring in over $2 million in franchise fees the vast majority of which we already are paying. That would bring us a surplus of over $1.2 million and that is with NO PROPERTY TAX INCREASE.  Let me repeat… a potential $1.2 million surplus with no property tax increase. 

There has been a lot of inflammatory rhetoric used lately about a city government being nothing more than a newer and smaller version of the out of control spending and taxing machine that Washington DC has become.  I’ve spent a lot of time studying the history of spending, deficits and national debt for the Federal government since its founding in 1789 and except for a couple of years during the reign of Andrew Jackson, our country has always been in debt, and in particular since the beginning of the New Deal we have run annual deficits almost without exception. 

The scenario I am laying out here (a large surplus with no tax increase based on fees we are already paying) is the total OPPOSITE of what is going on in DC.  I am not sure of all the options available to governments that would be in a situation like we have the potential to be in but I would be very curious to see if it is not possible to distribute credits in some form or fashion to homeowners who are paying more in fees than the city needs. Think about that possibility for a minute - getting money back from the government as a result of creating something (a new city) that will be able to give you more focused and local services. 

Of course we have no idea if the city council and mayor we choose would do this but if this area is as fiscally conservative as voting patterns indicate it would seem within the realm of possibility that we would select a leadership team that would at least consider this option. 

For those of you that are receiving the chain emails from anti-city people that use the specter of a tax increase as a rationale to vote "No" ….  before buying that argument hook, line and sinker, stop for a minute to look at some details of what the city would actually cost and how much revenue could be generated from just franchise fees with no need for a property tax increase. 

On the Ballot Committee’s website they ask the following question:

Why would you want to pay several hundred dollars a year more for something you are already getting?”

The more appropriate question is “why would you keep paying hundreds of dollars a year in franchise fees to other governments and corporations and not getting anything in return?” 

By voting "Yes" you are voting to seize control of a revenue stream that currently is going primarily outside of Peachtree Corners.  We can take those funds and redirect them to improve service delivery in our area at no cost to ourselves.  Seems like a pretty easy decision to me.  Vote Yes on November 8th!

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