The Board of Commissioners is considering a proposal to act on the Parks Bond Referendum approved by voters on Nov. 4, 2008. The Resolution approved by voters includes certain requirements. Quoting from the Resolution:
♦ “… assuming no additional general obligation bonded debt is incurred by the County during the term of the Proposed Park Bonds,” and
♦ “ ... the issuance of the Proposed Park Bonds and the payment of principal and interest thereon when due will not require an increase in the County’s current overall tax rates.”
The county has incurred new bond debt. Approximately $368 million for the stadium and another $10 million for the South Cobb Redevelopment Authority. While the county may argue that those new debts are revenue bonds funded by other sources, these “other sources” are new taxes that have no basis in Georgia law and, in my opinion, are illegal and subject to end if ever challenged. Further, these bonds are absolutely guaranteed by the county’s promise to tax all the property in Cobb County, giving them the essential features of general obligation bonds.
Cobb County still enjoys a “Triple AAA” credit rating. However, the last review from Standard & Poor’s included a warning that further debt increases may put that rating in jeopardy. Standard & Poor’s is not fooled by having bond debt issued by the S. Cobb Authority and the Coliseum Authority. They know the debt obligation belongs to Cobb County and they count it as such.
In 2008, the county’s overall tax rate was .00960. My latest tax bill shows a total current rate of .00965. There is reason to believe that even this current figure won’t stand for long as the General Fund rate of .00666 was artificially depressed for political reasons during the recent election campaigns. It appears also that the stadium debt is not yet requiring payments and does not show up in the millage rate. At today’s .000296, the Bond Debt millage is still lower than the .000330 of recent years. That rate is sure to rise next year.
The county has already broken through two of the constraints that were included in the Resolution approved by voters in 2008. They have incurred unprecedented new debt and tax rates have exceeded the 2008 level. I believe the county should recognize that the 2008 Bond Resolution is no longer valid.
Unfortunately, the county dragged out this discussion for two years and missed the opportunity to place a new referendum on the November ballot. Better planning could have ended this discussion with a new resolution rather than trying to resurrect something from eight years ago.
A look at the MDJ archives helps to understand the situation as it unfolded in 2008-9. These are story headlines from the Marietta Daily Journal.
♦ November 19, 2009: “Cobb halts parks bond process for 90 days.”
♦ February 5, 2010: “Olens: ‘Parks bond is gone’ Commission chair says millage rate hike would be needed to cover $40 million bond.”