Georgia lawmaker seeks more transparency in developing tax-incentive proposals

(The Center Square) – A Georgia lawmaker is pushing for more transparency in tax-incentive proposals for developers ahead of the upcoming legislative session.

Rep. Mary Margaret Oliver, D-Decatur, has pre-filed a legislative package that would allow local governments and school systems to be involved in the development of annexation and tax-abatement plans.

“In my central DeKalb County district and across the state, there is conflict and discussion about the financial impact of annexation efforts on school systems and on local governments,” Oliver said. “I want us to have a focused discussion and strengthen the statutes to allow for objections to annexations, review of bond validations with related tax abatement issues and increase transparency for all participants.”

Development authorities often offer property tax breaks or other incentives in exchange for new construction or expansion in their districts. The plans can retract millions of dollars of revenue from schools and public services.

DeKalb County and the county school board led a legal dispute last fall over the Brookhaven Development Authority’s $13.5 million tax-break plan for developers of a mixed-use project. County officials said the city’s plan would cost them millions of dollars.

Clint Mueller, legislative director for Association County Commissioners of Georgia (ACCG), said, most times, county governments are not aware of the tax-abatement plans until they are completed. Current law allows local governments to object to the abatement plans in court. Mueller said counties are not looking to have veto power, just more say in the process.

Oliver’s legislative package includes three measures – House Bills 23, 24 and 25. Together, the bills would ensure all those affected by annexation and bond validation with tax incentives would have input into the decision-making process and be allowed to make objections.

Although Mueller believes current law can foster abuse, he said the effect of tax-abatement plans and other incentives should be examined closely to determine the overall value for local governments. The ACCG conducted a study over the summer, but Mueller believes more assessment should be done before a legislative change.

“You could have a situation where a single-city development authority could allow an apartment complex not to have to pay any property taxes for 20 years. Yet that apartment complex, once it’s built, would put kids in the school system, and it would create demand on county and city services,” Mueller said.

In some instances, governments can offer tax credits to commercial developers who, in return, create jobs with long-term advantages for local economies.

“You got to look at the cost side of it,” Mueller said. “Is it just going to cost the governments more, and they’re not going to pick up necessarily new jobs out of it. So, you have to be balanced on how you do that.”

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