Cobb County Civic Coalition President Ron Sifen addresses the Cobb County Legislative Delegation on Tuesday morning at the YWCA of Northwest Georgia during the annual meeting to discuss ideas for the upcoming legislative session. Sifen asked the delegation to create legislation that would tighten the terms under which development authorities in the state give tax breaks to developers.
Staff-Kelly J. Huff
Kennesaw State University President Dr. Dan Papp addresses the legislative delegation, which included State Reps. Sharon Cooper (R-east Cobb) and Charles Gregory (R-Kennesaw) and Georgia Sen. Lindsey Tippins (R-west Cobb).
MARIETTA — Ron Sifen, president of the Cobb County Civic Coalition, asked the county’s legislators last week to create legislation that would tighten the terms under which development authorities in the state give tax breaks to developers.
Sifen said taxpayers in the CCCC are not opposed to tax abatements, but they do not like the way development authorities have discretion over who receives a tax break. Sifen told members of the Cobb Legislative Delegation at the YWCA of Northwest Georgia on Tuesday that development authorities don’t always have criteria to follow in giving tax breaks.
“What we are asking the legislature to do is basically to require development authorities to adhere to the established criteria, and not just open the door to we’re going to give tax abatements to for no reason to whoever we want to give them to,” Sifen said.
The Development Authority of Cobb County has the ability to allow a developer to skip out on paying its full share of taxes by agreeing to a schedule, which usually lasts 10 years, during which the developer can pay only a portion, sometimes as low as 10 percent, of the property taxes it would owe to the county and the school system.
The development authority uses the ability to waive the developer’s taxes as a way to incentivize companies to build developments in Cobb. However, the practice sparked controversy between the authority and the Cobb County Board of Education one year ago when members of the school board said the practice was unfair because it deprived the school district of its tax revenue for that period.
Clark Hungerford, chairman of the development authority, along with members of the county finance department, have maintained the practice helps increase tax revenue over the full 10 years because they say developers would not build in the county with tax breaks.
Hungerford said the development authority considers the total revenue and number of jobs the development would bring to the county before it decides whether to recommend a tax break for each development.
“We follow the policies and procedures that are in place today, and if the county commission and/or the legislature wants to make changes in them we will do our best to follow those policies and procedures,” Hungerford said.
Sifen said he wants to see a written-out set of criteria development authorities will follow when deciding to give a tax break, which should include input from the public and “all impacted taxing authorities,” Sifen said. The power of oversight over the development authority should be given to the county commission, Sifen said.
“The concern is, if we’re going to start setting the precedent of as long as we like you and it’s a big project, we’re going to start throwing tax abatements at any and every developer who comes along, then, you know, the properties do ultimately require services. They’re not paying their fair share of the taxes, and it’s going to fall on the tax payers to make up the difference in the cost. That’s why we think that’s not fair,” Sifen said.
State Rep. Sharon Cooper (R–east Cobb) said Sunday that she thought Sifen’s request was “realistic.”
“I don’t believe any authority should be able to spend our tax money without oversight,” Cooper said. “They should follow certain rules. They’re supposed to bring new development and with that development they’re supposed to bring new jobs. I certainly think that they should be held accountable for meeting those goals.”
Georgia Sen. Lindsey Tippins (R–west Cobb) said he thinks it’s important the development authority have a clearly written set of criteria that make developers eligible for the tax breaks. Tippins said Sunday a list of criteria will help the process become more objective.
“I do think you need a clear set of criteria and my concern with the way the tax abatements work now is it appears to be more subjective than it ought to be. I think you set a set of criteria and then any applicant that meets that criteria gets the incentive. I have a problem with subjectivity and that a board can award to one and not award to another. I think that’s the driving force behind having a clearly defined set of criteria so you know if you qualify or don’t qualify,” Tippins said.
There is no “one-criterion formula” for giving out tax breaks, Tippins said. Development authorities should consider both the number of new jobs created and the amount of increase in the county’s tax digest the county will experience when giving out tax breaks, Tippins said. In addition, Tippins said the authority should have more oversight.
“The authority is not the county, it’s a quasi-governmental authority, and it has the ability to affect people’s tax liability or being excused from tax liability. I think it operates like a government even though it’s not a government. That’s the reason I think close regulation of the development authority makes a lot of sense,” Tippins said.
Tippins said he’s not against the practice of giving out tax breaks, but he would like to see it reformed.
“I realize the sole purpose should be to bring jobs into the county, and especially those jobs that would not be here otherwise. If you’ve got an entity that’s looking at several different sites, and you have to sweeten the pot a little bit to induce them to come in, it’s probably in the public’s best interest to do that, but there needs to be a clearly stated set of criteria by which you make that decision,” Tippins said.
One lawmaker, State Rep. Charles Gregory (R–Kennesaw), said Sunday that he doesn’t want to see more regulation of the practice of giving out tax breaks, he wants to see it abolished.
“So called ‘development authorities’ shouldn’t be in the business of “incentivizing,” period. This is just a means of government transferring wealth from taxpayers to the politically connected (almost always in exchange for “special favors”),” Gregory said. “Since theft is wrong no matter what, the real discussion should not be about further regulation, but eliminating the practice altogether.”