State Rep. Matt Dollar (R-east Cobb) introduced the Development Authority Transparency and Accountability Act in the Legislature earlier this month. Dollar is challenged for his House seat in this year’s Republican primary race by Karen Hallacy, who sits on the board of the Development Authority of Cobb County.
The bill, House Bill 921, would require development authorities to provide quarterly reports, giving counties, municipalities and local school boards a way to stay informed on upcoming development projects that might get offered special tax deals.
Dollar said he’s aware of the chamber’s position.
“There are many within the chamber, many within the Development Authority that don’t want any change, they just don’t want it,” Dollar said. “I’ve tried to work with the business community to create a bill that protects economic development, but restores the public confidence. Confidence has been shaken and it needs to be restored and that’s really all this bill does.”
But Ben Mathis, chairman of the Cobb Chamber, says the current setup works just fine.
Dollar’s bill is in reaction to controversy surrounding the Development Authority of Cobb County offering a 10-year tax abatement to a project backed by mega-developer John Williams and put forth by his local agent, Tad Leithead.
Though the $103 million mixed-use Riverwalk project failed to meet the county’s criteria to get a tax break, the Development Authority still offered the company tax incentives that would have saved it about $3.5 million over 10 years.
That caused an uproar among members of the Cobb Board of Education, who mounted a legal challenge claiming they should have been informed earlier about the lucrative offer and that it infringed on their right to levy taxes. Leithead withdrew the project application in January.
Mathis maintains that if Dollar’s bill were to become law, economic development across Georgia would become more difficult.
“The Chamber opposes the bill. I think everybody understands in a perfect world that it would be nice to not have to address abatements and incentives but that’s not reality,” Mathis said. “If it weren’t for abatements and incentives you wouldn’t have businesses like Caterpillar ... you wouldn’t have Kia (in West Point on the Georgia-Alabama line). In Cobb County, abatements and incentives help to secure the new developments that have led to Home Depot’s call center that have led to 700 jobs.”
Confidentiality is paramount, Mathis said, in courting large corporations seeking tax breaks, and Dollar’s legislation “almost guarantees” a breach of confidentiality and loss of confidence in Cobb.
“We lost an opportunity for a 1,500-job initiative in the last couple of weeks where the people involved feared the confidentiality issue,” Mathis said.
He also pointed to the quietly negotiated $672 million deal that will bring the Atlanta Braves to Cobb.
“If there had been a breach of that confidentially, they never would have come here,” Mathis said.
Critics have argued unelected appointed boards, such as the Development Authority, should not have the sole power to hand out tax subsidies to wealthy corporations but Mathis says that line of thinking ignores that it was intentional to give an independent board power over economic incentives.
The state Board of Regents, which oversees Georgia’s public universities, is unelected but has discretion over how public money is spent, Mathis said.
He says that’s to keep the politics out.
“I think when you talk to the political people and ask the question, ‘Do you want to be voting on specific incentives?’ the answer is no,” Mathis said.
The current situation isn’t perfect, Mathis conceded, but he said it’s superior to a process that lets more individuals in the loop and provides more opportunity for news about prospective projects to be leaked.
“I think the current organization provides the appropriate way to handle these situations,” Mathis said.
Dollar said he’s aware of Mathis’s concern about confidentiality, but believes there is confusion over what his bill does.
“The bill does not compel them to reveal anything that is confidential,” Dollar said. “It’s a very straight-forward bill that tries to bring about more transparency and more accountability in the process to make sure the elected officials know what’s going on.”
State Rep. Rich Golick (R-Smyrna), recipient of the state Chamber of Commerce’s 2010 Legislator of the Year Award, said Dollar’s “pro-taxpayer” legislation simply ensures that local governments can be aware of potential significant revenue changes so they can budget properly while preserving the necessary confidentiality of the economic development projects.
“It’s really a timing issue: How do you ensure that schools can plan accordingly in a time of tight budgets while not blowing a significant economic development opportunity for the county as a whole?” Golick said. “As with all challenging issues, there is a balance to be struck, and my sense is that Dollar’s legislation seeks to find that balance.”