Many hoped dropping the sales tax rate would stimulate the economy, bringing in more out-of-county shoppers and giving local spenders more money.
So far, Whitfield County Schools Chief Financial Officer Ron Hale said that doesn’t seem to be working. Hale updated Whitfield Board of Education members Monday evening on the school system’s money matters and noted that the one year Whitfield County was without a 1 percent Special Purpose Local Option Sales Tax — all of 2011 — tax collections grew by only 1.5 percent over the previous year.
Hale handled finances for Whitfield County before moving to the school system in January.
“Really,” he said, “we should have had a 3 percent growth in sales tax (because of inflation) just based on what used to be a dollar now is (for example) $1.05.”
The Education Special Purpose Local Option Sales Tax, which is a 1 percent tax separate from the county SPLOST, ended in December, bringing in $61.1 million from 2007 through 2011. Many who pushed against renewing the five-year tax said doing so could help stimulate, or at least not worsen, the economy. Hale said it’s too early to know whether ending the education tax at least temporarily will have a positive impact on tax coffers, but he doesn’t expect it will.
School board member Gary Brock agreed with the rest of the board to refrain from placing an ESPLOST vote before residents on last November’s ballot because of the down economy. He’s also been a proponent of the sales tax as one of the most effective ways to raise local funds, and he is skeptical that having a now 5 percent tax rate for Whitfield County rather than a 7 percent tax rate will make that much of a difference in the economy.
“Do we think people would drive from Chattanooga just because we’ve got a lower sales tax, not thinking of the rising gas prices?” Brock said.
Hale said Whitfield County is the only county in Georgia without either an ESPLOST or a SPLOST. Fewer than five Georgia counties are without an ESPLOST, Superintendent Danny Hayes added.
School board members have said they’re considering asking voters to renew the ESPLOST to pay off an estimated $35.5 million in debt that they took on to build new schools, buy computers and complete other projects. They haven’t set a date for the proposed vote, but it could occur in July or November. They’re also talking of using some of the money for technology and building repairs, though none of the details have been finalized.
An ESPLOST, Hale said, would be expected to bring in $17.3 million per year, which would be split based on student population among the county school system ($11.41 million) and Dalton Public Schools ($5.89 million). Of the combined total, local residents could expect to pay about $11.5 million, or about 67 percent, with the rest coming from non-resident shoppers, according to projections.
To raise the same amount of money through property taxes in a single year, the board would have to increase the tax rate by $6.92 per $1,000 of assessed value from its current $14.76. The Dalton school board meanwhile would need to raise taxes by $1.77 per $1,000 of value from its current $7.85. County taxpayers pay on 40 percent of a property’s value, while city taxpayers are taxed on 100 percent of the value.
In addition to money needed for debt, school officials said they still need money for ongoing computer, wireless Internet access and infrastructure updates and more than $100 million of total building upgrades and repairs on almost every school in the system.