“We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic either of an undeveloped people, or of a decadent civilization. America is neither.” Calvin Coolidge- 1924
This one just about slipped by me: Flowery Branch inches ahead with downtown changes. I will admit that I kinda just skimmed through it and nothing jumped out at me; but while talking to a buddy who works at the commissioner’s office, the article apparently tweaked the commissioner from South Hall. To hear my buddy describe it, Commissioner Lutz was pissed.
Having a commissioner upset about an article is probably nothing new, but it made me take a second look. Basically, the article says that Flowery Branch plans to demolish and old factory, buy some property downtown and to do some sort of market analysis. So what is the big deal?
It took some digging around, but I think I see the problem and it starts with the Tax Allocation District Advisory Council. This group was formed as a result of a Tax Allocation District being created in Flowery Branch. According to the GMA website:
“..Local governments the authority to sell bonds to finance infrastructure and other redevelopment costs within a specifically defined area (a TAD). The bonds are secured by a “tax allocation increment,” which is the increase in property tax revenues resulting from the redevelopment activities taking place within the tax allocation district. Tax increment financing allows cities to charge the costs of constructing public facilities and infrastructure to be charged directly to the businesses that use them rather than the public at large. In return, the businesses benefit from the construction of facilities that might not otherwise be available to them.
When using a TAD, a city designates a specific geographic area that has the potential for redevelopment, but which suffers from blight or other “economically or socially distressed” conditions. As public improvements and private development take place in the area, the taxable value of property in the TAD increases. The city collects the total revenues, putting the increase in revenues as a result of new development into a special fund to pay off the bonds that financed the public improvements, while the remainder goes back into the city’s general fund. The TAD is dissolved when the bonds have been retired and any other public financing has been repaid.”
The issue seems to be that the county decided to partner with the City of Flowery Branch in their TAD. So basically, the county funds over 2/3rds of the work. While that may not seem like a big issue because the county is flush with cash, the problem is that Flowery Branch will most likely make these properties tax exempt. So not only will the county never see repayment because of an increase in tax value, by the city purchasing the property and spending the money on tax exempt property, the county actually loses property tax revenue.
When this is compounded with the fact that the cities are about to face off with the county in court over sales tax revenue, I was surprised to find that the county was in the position to fund over 2/3rds of Flowery Branch’s growth agenda. I think we are likely to hear more about this over the next month. If you hear something, we have added a new tip line: email@example.com. Drop us a line because at times things look a lot more innocent than they may really seem.