Amendment #2 (TAD) – Voters vs. the Court

In assessing a constitutional amendment, the first rule should be “beware of the easy soundbite” – because it is often wrong.

Such is the case with Amendment #2, which has been pilloried as “sending school dollars to developers” when it actually only keeps the law the way it was until the Court intervened in February of this year. 

The reality:  Amendment 2 will give voters the chance to take back lawmaking from the Court and approve something they have already approved in a statewide vote – but was taken away from them by one activist lawyer and the Georgia Supreme Court (you know, the same ones that almost declared capital punishment unconstitutional)

The facts:

1.  TAD’s were created by a 1984 constitutional amendment that passed with 72% of the vote statewide.

2.  Every single TAD created since then was also approved by a vote of the citizens within the jurisdiction they have been used in a public referendum (for example, Gwinnett just approved TAD’s this summer by a wide margin).

3.  Two or three levels of local government – including the elected school board – also had to sign off on all new TAD’s since then.

4.  Since that time, TAD’s have been operating using the new tax dollars created by their existence (including new dollars created in the school tax digest) to pay for the infrastructure they need.  Everyone is well aware that TAD’s have involved the use of new school tax dollars (no EXISTING school dollars) since 1984.

5.  The Georgia Supreme Court – acting on a single-party lawsuit by an activist lawyer in Atlanta – overturned all these levels of voter and elected official approval and used one part of the Constitution to overturn another part of the Constitution in February of this year.

6.  The entire effect of Amendment #2 is to take TAD law back where it was.  In other words, it actually changes far less in state law than either of the other 2 amendments.

7.  TADs have never – and will not in the future – use a dime of existing school tax dollars.  Period.  TAD’s create brand new revenue that did not exist before and use that revenue for a short time to pay off the infrastructure bonds – and then deliver all that new revenue to the schools and local government.

The anti-TAD activist will point to isolated problems in a couple of TAD projects, but that’s life.  The overwhelming reality of TAD’s is they have been very successful in promoting high-quality redevelopment such as Atlantic Station.  They are used equally well around the country.

And when the economy goes soft like recent months, it seems foolish for us to buy into the soundbites of the other side and take away forever even the option of using the TAD financing tool, even if the voters and local elected officials approve of it and want to use it.

Voter choice and local option vs. soundbites and Court control.  Make up your own mind.

19 comments

  1. Bill Simon says:

    “The Georgia Supreme Court – acting on a single-party lawsuit by an activist lawyer in Atlanta ”

    Clint…aren’t ALL lawyers an “activist” of some sort? Whether to get a client off, sue for damages, defend from damages, etc…all lawyers are activists.
    Please…if you’re trying to convince me of something in a logical fashion, DON’T use what you think are code words.

  2. Bucky Plyler says:

    I’m not against the concept or reality of TADs. I just don’t think we need to put them in the constitution.

  3. Clint Austin says:

    I am trying to be fair to the gentleman involved. Others have called him less favorable names. He was, shall we say, looking for a fight on this one.

    And not all lawyers are activists – for example, Doug Chalmers!

  4. Clint Austin says:

    Bucky – that’s the point. They are already in the Constitution, and will remain there, only hobbled by the Court after the voters made it clear what they intended/approved of many times over the years…

  5. Bucky Plyler says:

    So then..maybe some of us don’t think the admendment needs additional language to beat the SC ruling…I think local decisions on TADs may always be sued…winning a lawsuit is another thing.

    I assuming that a TAD has not been made illegal in GA.

  6. Clint Austin says:

    Constitution was cleaned up in 1982. The biggest target for cleanup in that document was all the “Local Constitutional Amendments.” TAD amendment was passed after that, and even the amendments from before 1982 were not necessarily scrapped – most were just “renumbered.”

  7. BobG says:

    As you know, Clint, many anti-amendment folks argue that school systems (and education in general) are the victims of TADs and greedy developers. The school systems that have participated in TADs to date don’t see it quite that way.

    A school system is not obligated to participate in a Tax Allocation District at all; it can opt out. Because they have that option, and because the school tax is usually a majority percentage of the total tax bill, the schools are in a great position to negotiate the extent of their support. And many school systems have become very savvy at maximizing the immediate benefit of a TAD.

    Cherokee County schools had all development fees waived as part of their agreement to participate in the Holly Springs New Town Center TAD.

    In return for Atlanta Public Schools’ support of the Westside TAD, the system received $5 million to build Centennial Elementary on the site of the old Techwood Homes, plus an additional $2 million for other capital costs.

    For the Beltline TAD, APS had negotiated for $10 million for recreational facilities and ballfields within the TAD; subsidized or free transit rides for APS students; a trust fund for educators and staff; and $150 million for educational programming, paid at $7.5 million per year from years six to 25 of the life of the TAD.

    It is ironic that it was a successful challenge of the use of education tax revenue for the Beltline TAD that derailed almost all TADs statewide and precipitated the need for Amendment #2. If you want to talk about a school system losing money, here it is! The APS stands to lose tens of millions if Amendment #2 is not approved on November 4.

  8. I’m in favor of TADs but not with school money involved. Why is there such an insistence that school funds be involved?

    School funds are for the schools not for development let’s keep it that way.

  9. Clint Austin says:

    Buzz,

    Two things:

    1. The biggest part of the property digest is the school tax digest.

    2. The talking point “developers are getting school funds” is so simplistic it is basically false. TAD’s do not give one cent of existing school money to developers – period. TAD’s only use NEW tax money created ABOVE AND BEYOND the existing tax revenue.

    In other words, TAD’s are a gift horse. They haul in a sack of new tax revenue and eat from that sack and not from existing feed. When they get done eating, they leave behind the extra sack of feed for the schools to have forever.

    This allows me to get to the punchline: beating up on TAD’s for “taking school money” is looking a gift horse in the mouth. TAD’s actually add money to schools, and they never take away from them.

  10. Truthteller says:

    Erick, Clayton,

    It really, REALLY is a bad idea for consultants who are working for pay on a project to use Peach Pundit front page posting privledges to promote their clients.

    This is really a BAD idea that should be prohibited, as it will pervert the open transparency of PP.

    In fact, I thought this already WAS prohibited on PP.

  11. Clint Austin says:

    Truthteller,

    I’ve been transparent about my role, which has been both directly and indirectly in support of TADs. I suspect that’s why you know about it. Supported TAD’s long before I was retained to help with them.

    People who are paid get on here often to support the folks they are working with (me, Rountree, others). Lots of those folks are doing it under pseudonyms, which is fine – but certainly not transparent.

    As long as I’m using my name and everyone knows where I stand, why not consider my argument on the facts instead of trying to get it taken away?

    The call is others to make, but I hope we err on the side of free speech here and just consider arguments on their merits or lack thereof…

    Clint

  12. Clint Austin says:

    Jason,

    Good suggestion. This is the first topic I’ve blogged on heavily that I was paid for, and it came up in an earlier thread so it was “asked and answered” in my mind. Ultimately, I really don’t consider it that important overall because an argument is either good or bad, regardless of who or why it is being posted, but since it is important to others will follow your wise suggestion.

    Clint

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