It appears that the district has put forth a strong argument in Superior Court to block validation of $103 million in bonds for the huge project backed by developer John Williams. The Development Authority of Cobb County, whose members are appointed by county commissioners, has approved the bonds and tax abatements over a 10-year period as incentives to the developer without the consent of the commission or the school board — which is not required by state law.
In its motion, the district rightly contends that the right of taxation in the case belongs to the school board and “the Development Authority cannot give it away.” And no one involved in the tax-break deal is seeking “to protect the school district or the school board’s rights.” Validation of the bonds by Senior Judge Michael Stoddard, the motion argues, would take away the right of the school board and the district “to collect the taxes due it.”
The district also points out that Georgia law does not allow waiver of school taxes. Obviously, the Cobb development authority has no taxing power. Another strong point by the district is that the bonds will “benefit a private developer and place the public’s funds at risk.” This is a “gratuitous gift of public funds,” the motion says.
Still another point that could be key in Judge Stoddard’s decision on whether or not to validate the bonds goes to the issue of the development authority’s apparent lack of policies on how it reviews and approves such bonds and granting “lucrative tax abatements to private developers at taxpayer expense.” Nor does the authority have any means of ensuring “that the proposed project will actually provide benefit to the public,” the purpose of the state law governing development authorities.
As for the economic benefit, the school district asserts that the Riverwalk development will “allegedly create only five jobs.” Another telling point, it seems to me, is the district’s contention that the authority cannot show “that it engaged in any meaningful review of the public benefit at the time of passing the bond resolution because, in fact, it did not engage in such a review.”
Outside of the court battle, the constitutionality of such tax breaks by the development authority is questioned by state Sen. Lindsey Tippins (R-west Cobb). He has asked Commission Chairman Tim Lee for a legal opinion on that question, and Lee agreed to get one. Tippins is on the right track. No way should unelected agencies have the unrestricted power to issue bonds and hand out tax breaks without review by elected officials.
Now Judge Stoddard has the opportunity to set things right for the benefit of Cobb taxpayers, set a precedent for the benefit of other Georgians and set the stage for legislative action to fix the problem.