BRADENTON, Fla. - Two Georgiasenators are co-sponsoring bills this week addressing the short- and long-term affects of the state Supreme Court's ruling on Feb. 11 that said using school tax revenues in tax allocation districts violates the state constitution.
While the high court's decision applied to the validation of $200 million of TAD bonds sought by Atlanta with the support of Fulton County and the Atlanta Independent School System, bond attorneys said it effectively prevented most, if not all, tax increment financing plans from going forward because school tax revenues usually make up at least half of the revenues flowing into TADs.
One bill being filed this week would seek a referendum in November asking voters statewide to amend the constitution and allow school revenues to be used in TADs, which are similar to districts in other states that use tax increment financing.
A second bill would attempt to amend Georgia's existing TAD law in a way that would allow financings to move forward before the November vote, said Sen. Kasim Reed, D-Atlanta, who is working on the initiatives with Sen. Dan Weber, R-Dunwoody.
A number of TADs around the state - there are several in Atlanta - had redevelopment projects ready to move forward with bond financing when the high court stopped them. The Supreme Court decision has caused instability for the TADs and their financing plans, so the lawmakers are moving swiftly to seek a way to bridge the gap until November, said Reed.
"Because the General Assembly is in session we wanted to send a message to the investment and financial community that we understand how great a challenge this has created," said Reed. "It's just a matter now of getting bond lawyers on one page in terms of what is the appropriate remedy."
The effort is supported by Casey Cagle, the lieutenant governor and Senate president, who appointed Weber to lead an informal Senate working group "to develop a reasonable and responsible fix to this issue."
"The recent decision by the Supreme Court of Georgia has threatened a critical infrastructure and economic development tool for Georgia and we must act and develop a solution," Cagle said in a statement.
The state Supreme Court issued a unanimous decision that said using school taxes in TADs violates the Educational Purpose Clause of the constitution, which essentially means that school revenues must solely be used for school purposes.
Reed anticipates voters will support the constitutional amendment.
"My sense is support for it will be overwhelming if we do the hard work explaining how important it is," he said.
The bill proposing the referendum and constitutional amendment must receive two-thirds of the votes in the House and Senate to pass.
