BRADENTON, Fla. — Atlanta voters are being asked Tuesday to reauthorize a sales tax that supports the city’s water and sewer system.
The municipal option sales-tax referendum is appearing on the presidential preference primary ballot.
If approved, the 1-cent tax would be collected over the next four years and support $750 million of water and sewer projects.
Sales tax proceeds also help the city finance a $4 billion capital improvement plan for its aging sewer system mandated by a federal consent decree.
Atlanta’s Department of Watershed Management, an enterprise agency, had $3.18 billion of outstanding water and wastewater bonds as of June 30, 2011.
The bonds are rated A by both Fitch Ratings and Standard & Poor’s, and A1 by Moody’s Investors Service.
City officials said the sales tax helps keep Atlanta’s water and sewer bills lower, and it allows the city to spread the burden of paying for the federally mandated overhaul of the sewer system to visitors and business commuters who use the infrastructure but do not pay water or sewer bills.
Without the sales tax, financial experts estimate that Atlanta would have to raise water and sewer rates by up to 30% over the next four years to meet its financial and environmental obligations, officials said.
The tax was first approved in 2004, and reauthorized by a 3-to-1 margin in 2008. From 2004 through 2010, tax proceeds provided more than $700 million for the city’s water and wastewater systems.
If the tax is reauthorized Tuesday, the Department of Watershed Management projects there will be no rate increases for city water and sewer customers over the next four years.
Without the tax, “we would have to raise the rates to meet our bond covenants,” Mayor Kasim Reed told the Atlanta Journal-Constitution. “That is just a fact.”