PTC Council wrestles with range of proposed tax hikes

Citizens will get another chance to have their say Thursday night about the proposed $26.7 million budget for Peachtree City.

The question is whether there are enough votes on the City Council for the two property tax rate options proposed so far. That may be fleshed out a bit better during a public hearing on the budget at Thursday night’s 7 p.m. council meeting at City Hall. No final vote is expected for another two weeks.

One proposal calls for a half-mill increase, which has been advocated by Mayor Don Haddix and Councilman Doug Sturbaum. The other option, a 1.25 mill hike, is being considered by council members Vanessa Fleisch, Kim Learnard and Eric Imker, though none of them expressed a concrete opinion in favor of it at last week’s budget workshop.

The 1.25 mill tax increase would cost $108 a year for a home valued at $272,000. The 0.5 mill increase instead would cost $43.

The advantage seen to the 1.25 mill increase is that it would make up more than half of the projected $18.2 million shortfall the city expects over the next five years. The remainder of that shortfall would be covered by spending down the city’s reserve fund to the minimum level required by city policy: an amount equal to 20 percent of the city’s annual budget for any given year.

The projected $18.2 million shortfall is tied to the loss of funds from the expired transportation special local option sales tax. Also expected is a steep reduction in the city’s regular local option sales tax due to the city’s population growth flattening out, compared to increased population growth in unincorporated Fayette County and its cities.

The proposed budget includes no new employees and no raises of any kind for city staff. It also includes the purchase of eight new police vehicles and a new fire engine, all of which will be purchased with cash reserves in lieu of financing. It also includes no staff cuts, no furloughs and no pay cuts.

More discussion is expected on a new proposal from Learnard to have the city hire a staffer to assist the Development Authority of Peachtree City. DAPC is tasked with recruiting new businesses, helping strengthen businesses in the city’s village retail centers and also luring new retailers sought by local residents.

Haddix and Sturbaum want to increase the DAPC budget from $35,000 to $150,000 instead so the authority can hire its own employee. But that move has been opposed by the other three council members: Fleisch, Imker and Learnard.

Last week Learnard said the city could instead hire an employee to assist DAPC with most of its functions, which a number of other Georgia cities already have. But Haddix contended such an arrangement was illegal because development authorities are intended to be more autonomous under Georgia law.

Haddix and Sturbaum have said they will vote against any city budget that doesn’t include the increased funding. Their argument is that the city needs to increase its efforts to attract new jobs beyond the current level, which is handled completely by volunteers.

inkslinger
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PTC Needs

to vote down any millage increase in the 1.25 range. Mayor Haddix brings up a point, in that Councilman Imker seems to have already flip flopped on his "no raising taxes to balance our budget" promise of less than one year ago. Although the votes are not in yet, he seems to be leaning toward this very high tax increase. That will never go away.

Although I originally balked at the 150k for a Dev. Authority budget, I now feel that money spent will, in the long run, benefit us here. I have seen the Authority members at work (all volunteer, mind you) and they are dedicated to bringing the right development to our city. They will have a difficult task as it is, as they will be competing for industry that can choose to locate up at Oakley Ind. Blvd. But we need to be in the fight for what we can bring to a much nicer city than up over the county border.

The notion of a part-time city employee being hired (as suggested by one council member), even if it is found to be legal to do it, could not compare to what a dedicated full-time staffer of the Authority could accomplish.

Having moved here from a state where the budgets were balanced on the backs of the residential property owners, I can tell you this huge millage increase will be a big mistake. Picture your property tax bills in the mid to high thousands range, not the low thousands range. That is where it will end up very shortly if we allow these millage increases to be our main source of revenue.

Have we all forgotten that we also get taxed from the county and state? Where are those numbers going to end up in the next few years?

SPLOST, if and when we agree that it could be structured to be truly beneficial to reduce our debt, is viable. I am sure we could convince the county to come in on one with us. Think of how many from out of Fayette County come here to spend their money. We would reap the benefits of that spending. Are you saving all that 1% (or 1 cent) former SPLOST money that you paid every time you shopped here that expired this past spring? See, you don't even know you are not paying it anymore. That is how painless a new, correctly structured SPLOST would be for all of us and others who spend our/their money here.

I appeal to Councilman Imker to stay true to his pledge last Nov. and come back to what we voted him into office for.

Spyglass
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The way I see it goil..

is we can increase it 1.25 now, or increase it more later.

I always heard this saying growing up..."eat the ugly frog early in the day".

Feel free to disagree, and if you need tree frogs, my neighbors pool has plenty. :)

inkslinger
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Spy, at what point

do you say stop with the tax increases to support our budget? Where is your "Okay, enough already" point? Do we need to play catch up? You bet, but why just with property tax? Why not increase the revenue in multiple ways (SPLOST, new industry, new retail to fill empty spots, a small millage increase, lean budgets, possible outsourcing(uh oh!) etc.)

Don't you see the waste that has been cut out of the budget in the last 6 months since the new council took over? Why didn't management cut out this waste on their own over the last 6 months prior to January? Or the last year or two or more? They knew how bad the finances were for the city..the CFO was making it known for how many years? And yet, management continued to spend and spend and create new budgets that continued to add to the problem. Councils have changed and will again, but the same wasteful spending mgt. is still in place. Till that changes, we are repeating our troublesome ways here.

Now, you're gonna give them a huge chunk of change off our backs to add the spending back in??? Where are the cuts gonna go that have just been accomplished? It's like handing a new credit card to a compulsive spender(city mgt.)....here you go, enjoy! Don't worry about when the bill comes in, I'll(property owners) pay it no matter how much you spend.

Attacking this on multiple fronts will give us more ways to raise the needed money. And be less painful to the homeowners here.

Spyglass
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What else would you cut?

I have not studied the budget all that thoroughly, I'll admit it. Haddix was touted by many as the savior in the last election by many on here. He seems to think a tax increase would help.

Not trying to be curt, but what else can we cut? I didn't move to Peachtree City for the things the City "doesn't offer". I like the things we have here. Do I utilize all of the amenities? No, I doubt anyone does that.

NUK_1
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100% agree, PTCGOIL!

"Attacking this on multiple fronts will give us more ways to raise the needed money. And be less painful to the homeowners here."

I have said this in the past and don't see any other way. One dimensional approaches to this problem will not suffice, and that also means everything from tax increases to employee and service cuts to SPLOST have to be on the table. No sacred cows or "bad options" at this point due to the blatantly obvious fiscal mess PTC is in and will be in for the future without direct action now.

Mike King
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Well Said, PTCGOIL!

As long as you have the same folks minding the store and providing Council advice, true change will be long in coming. Tax increases alone merely extend their tenure and little more. Sixty-three percent of city revenue is for payroll, try running a business that way.

Don Haddix
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Haddix: One Point of Clarification

It isn't 1.25 for 5 years on their proposal. It is 1.25 + .196 + .196 + .196 + .196 equaling a total 2.034 increase for a total rate of 7.589 in 2015.

Our current rate is 5.533.

Courthouserules
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Mayor: tax increase

OK, since we go from a current rate of 5.533 to your projected rate of 7.589, isn't that a 30 something percent increase in millage rate? Who knows what the property values will be?

It also assumes that property values would remain the same doesn't it? Not for the percent increase but for income.

Where did the .196 come from? and why?
Is it a decrease in property values or an increase in spending?

You know the only way to show this and have it clear or understandable at all is this:
Amount of dollars each year collected by millage taxes.
Amount of projected expenses spent each year.
If you might also add a LOST or a SPLOST or more hotel tax or some other tax, that also should be enumerated!
Maybe Washington, DC will also contribute? Georgia? No, no way.
Might also want to mention city head counts each year! And Payments on the millions owed.

Isn't a City Manager or a Lawyer supposed to be able to make these clear projections?
I am aware that if you were to get these numbers done and publish them all at once, you may be tarred and feathered!

della
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Point of Clarification - Whole Story

So what's your proposal wind up at? Why not give the whole story if you're going to give one side of it?
I see the small increases easily erased with prudent cost savings. Are your out year increase easily erased? If they are the same values then let's go with your next year plan which is lower.

Don Haddix
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Haddix: Della - Whole Story

My point is those behind the 2.034 have nothing other than funding by tax increases proposed or thought about. Not one speck of economic growth to offset the increases. Pure tax increases only.

As for your prudent cost savings even Councilman Imker now admits he cannot find any more cuts.

I am looking at stimulating economic growth via DAPC. Even one company found pays for the full five years of funding plus kicks money into the General Fund to offset tax increases. Two even more. Three or more, fantastic. There is a real Return on Investment in funding DAPC that you do not get from tax increases.

As well the 1.25 plan becomes moot if the economy takes a double dip dive at the end of the year if those projections prove accurate. Then we are all stuck with a 1.25 that is no where near high enough to offset our Budget issues.

How many people will move to PTC with a tax rate of 7.589? How many industries will bring jobs here?

We really truly need a Debt Reduction SPLOST. That take off over $3 million of debt payments from the Budget each year, get rid of our current debt totally, leave some funding for path work and allow us to lower the property tax rate instead of increasing it.

Yes, I understand totally SPLOST is a function of trust. We can get the right formula through this Council, which leaves the County portion in question.

I am just trying to get across the 1.25 model seems really simple but it is not the best for solving our problems.

Spyglass
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Don, why do you keep bring up SPLOST for PTC?

It can't be done on the City level. Not unless some laws are changed.

Don Haddix
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Haddix: SPLOST

Totally agree, Spyglass.

I keep bringing it up because it is the best answer for PTC and the County as a whole when done properly. Changes in the law have given us far more flexibility in uses.

It is also a less than subtle hint of how important every County election is to PTC. We have Brown, who is opposed to SPLOST for the wrong reasons and Smith and Maxwell, who are not opposed, but support the WBP, which Council asked them not to fund and to redistribute the money to the projects of the Fayette cities, which is fully legal to do.

Saying that I should kick in the cited legal case defending the funding has nothing to do with redistributing funds to other projects, which is fully legal, just requiring a renegotiation of distribution with the cites. It is about an approved SPLOST project that was changed from the approved location and a redesign of the project to something other than approved.

Changing a proposed project is totally illegal. Redistributing funds is not.

SPLOST's actually give citizens more control over taxes if the voters do their due diligence. Property Tax changes are totally controlled by Councils, Commissions, etc.

Yes, I understand this is a bit of an intrusion into the County election. But I feel justified because Maxwell and Frady intruded into my election by doing fund raising in PTC for my opponent, and Smith backed Logsdon for State, thus giving some insight into their thinking as regards PTC.

To be balanced Brown did oppose the SPLOST proposal I made to the AFCG for this year that had full backing by Council

Courthouserules
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Mayor

Are all these Fayette TEAS and "Conservatives, and republicans (since they are different groups, for such a debt relief tax (SPLOST)?

How much do you want? About 25 million sounds about right?
Would that make our sales tax, what---maybe 10-15%?
You would totally destroy the "Fair Tax" dudes with that kind of number---they want to add 30% and that doesn't count the state taxes, etc.
WOW, we could be at 40-50% sales taxes pretty soon!
Better remove some heads! Now! Many!

Spyglass
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Don, SPLOST..

You will never get the bloggers on here to agree with you. I'm not sure that matters, as I think most of them are the same person, or at best, puppets of the same person.

I agree with you on a well done County SPLOST...it would help.

Courthouserules
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SPY

Well, if we knew what a "well done" SPLOST is????????Maybe?

I didn't know everyone on here was the same person! Who is this mastermind who perpetrated that and made puppets from them?

della
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Whole Story

Thank you for your reply Mr. Mayor. But you still haven't answered the question.
What millage rate do we wind up at with your proposal? Assume you get your funding for DPAC and a new SPLOST with both senarios. Isn't your proposal still higher?

Don Haddix
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Haddix: Della

With SPLOST it would be around 1 mill roll back on Property Tax once we started collecting it.

Kick in DAPC with every add to the economic base we could roll back more, depending on the income generation they represent.

The whole point is to get off of looking to Property Tax as our main income source since it falls 100% on the backs of property owners only.

A properly executed SPLOST distributes the cost over a lot larger base and generates more income than a property tax. It also aids in attracting jobs by offering a lower property tax to industries that can be setting on millions of dollars of property. Even large commercial building would pay less and be able to offer lower lease rates to attract more tenants.

A lower tax is a tool for a funded DAPC to use to attract jobs.

More business and industry translates to lower property tax via higher Sales Tax collections from them and their employees.

All property tax does is cost more.

Before anyone says it SPLOST can be used for many general expenses now. It is not limited to transportation only any more. And that is because more and more people are realizing Property Tax is a very unfair tax. It unduly puts the expenses of running government on property owners only.

PTC Observer
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Mr. Haddix - Millage rate explained

:-)

So, what Mr. Haddix is saying is that for each $100,000 of assessed value of your home, the calculation goes like this.

($100,000 X 5.533)/1000 = $553.30 per year in property tax.

So, for each $100K in value:

Current $553.30
Year 1 $678.30 net change $125
Year 2 $697.90 net change $19.60
Year 3 $717.40 net change $19.60
Year 4 $737.00 net change $19.60
Year 5 $756.60 net change $19.60

So, if you home is valued at $400K your yearly tax would be $3,026.40 for property, not including school taxes, etc.

Now everyone should decide, is it worth living in Peachtree City with all of its benefits for this type of increase?

Personally, I think it's a bargin if we have a responsible government that lives within its means. We need to pay off our debt, have money in the bank and live within our means.

You up to the task Mr. Mayor?

Ninja Guy
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Haddix Thinking on Sales Taxes Wrong Model for PTC

I could not disagree more with Mr. Haddix on his statement, copied and pasted below.

"More business and industry translates to lower property tax via higher Sales Tax collections from them and their employees."

Trying to fund a city budget primarily from sales taxes will only turn PTC into the next Riverdale, or a minimum the next Newnan. First, trying to increase revenue by luring business/industry for the purpose of sales taxes is a never ending cycle. Budget shortfall/need to reseed the soccer fields? Quick, run out and find some company, any company, to locate in our fair city to generate more more tax revenue. Second, de-linking property owners from the city's revenue source is a bad idea, as it reduces the incentive of property owners to keep an eye city expenditures, and it increases the influence that business/industry has on the mayor and council. We can see that this model has failed miserably all around Atlanta, yet Mr. Haddix wants to implement it here. Why?

Take a look at the numbers run by PTC Observer. Is 3 grand, or 4 grand, or even 5 grand, too much to pay to live in a PTC without a 'We Buy Gold' store on every corner? Mr. Mayor, why do you want to turn PTC from something pretty darn good into something very ordinary?

I would like to hear from Mr. Imker on what he thinks of this sales tax-driven revenue model.

Courthouserules
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TAXES?

Well, this is the ONLY thing that I agree with the TEAS about!
We currently pay enough taxes (sales and property) in PTC and the county.
The BUDGET simply has to be cut to match the current income! Do it!

We may be in for several years of current income or less. Can not keep raising the taxes to pay for current budget when 10-15% are out of work and many on half salary! The heads have to go to meet the income.
I have never seen such stubborn republican tax raisers.
Is it that city employees help elect these guys?

Don Haddix
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Haddix: Ninja

I said not word one about recruiting more retail. We are overbuilt now and cannot fill the existing stores due to a lack of consumers. I fought against such as the CCD development and voted against it at every step.

Good paying jobs come from colleges, R&D, engineering, good paying profession jobs, etc located here. Not retail.

By filing homes you actually increase revenues at a lower millage by increasing home values via demand. You increase LOST revenues by increasing sales because people shop near home and work.

Once the debt is paid down using SPLOST other General Budget costs can be paid for using SPLOST, lowering Property Tax even more.

I am puzzled why you would appeal to Councilman Imker to evaluate what I have said. Did he not run on a zero increase and then propose a 1.25 increase?

I have been consistent for 2.5 years in office.

The real issue is electing the right people. Elect the wrong ones and SPLOST, Property Tax, LOST and all other forms of income will be misspent. You can get another Council of built it and they will come wanting to be the next Coweta or Gwinnett.

Ninja Guy
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More Sales Tax Talk with Haddix

Mr. Mayor, thanks for clarifying your stance on the sales tax issue. You make some good points. However, there are two variables in your revenue model--good paying professional jobs located here AND retail, which is the collection point for sales taxes. Sure, we would all like to have only the 'good' retail stores in our area to collect our sales taxes, but this model puts too much pressure on city councils to allow any type of retail just for the sake of generating revenue. Case in point--how long before the Sam's Club just across the county line drives this PTC council, or other councils several years down the line, to try to compete by bringing in a BJs or similar to prevent our high-paid engineers from buying their next set of tires at Sams rather than one of our 4-5 tire stores here in PTC? As I said in my previous post, this model leads to race to the bottom of retail, culminating with 'We Buy Gold' stores, of which I think we have one now. More to follow? PTC will never win this battle with Newnan/Coweta, nor should it try. Also, by trying to generate the bulk of city revenue with sales taxes creates the situation where the city council works to serve the interests of business over those of property owners. The health insurance industry is a good example--doctors are paid by the insurance companies, putting them in a position of greater influence than the patients, although the patients are the ones ultimately paying the bill through premiums. Same for sales taxes. Local shoppers pay the taxes, but the retailers cut the check to the government. Sure, electing the 'right' people works wonderfully in theory, but as you pointed out, some candidates run on one platform and then change their stance once in office, but we are still stuck with them for 2-4 years. I only bring Mr. Imker into the discussion because he gets a lot of attention on this site, but we don't hear much from him personally.

Don Haddix
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Haddix: Sales Tax

Ninja, the majority of the last 4 years didn't pursue jobs but pursued retail. How did that work out?

Defend the Village Concept, seek good jobs, no more Big Boxes and no more build retail stores and homes to just build and collect one time fees. No more annexation to just keep building and growing. Use zoning and overlays to control growth.

Controlled growth promotes better quality retail locating here. Not just any retail.

Either defend what PTC is and wants to be or become everyone else.

You are right on campaigns that say one thing and then do another. One answer is remove term limits when you get people you trust. But that carries potential issues of another kind.

What we cannot do is to make decisions that drive people to buy in Coweta or the County.

Ninja Guy
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Long Live Don Haddix!

Mr. Mayor, your last post has earned the respect of this Ninja Guy. "Defend what PTC is and wants to be or become like everyone else." Nicely put. I hope you stay the course on that and hold everyone else's feet to the fire. But, I still don't see why you want to move away from property taxes as the primary source of city revenue. Is it because the citizens might complain too much? You said before that a property tax-oriented revenue model was unfair. In what way? A few thousand dollars a year to live in PTC is a great deal. I'm sure many PTC residents spend more than that taking the kids to Disney World for a week, and they would complain about spending about the same amount for city/county services PLUS a very good education for their children? Some might, but most probably not. Also, what about user fees? After I get the first sticker for my golf cart, I NEVER have to pay for one again? Is that how it works here, or am missing something? With a cart population of say 10,000, even a nominal fee of 10 bucks a year would generate $100,000 toward cart path maintenance. A more reasonable amount of 30-50 bucks would bring in $300,000 to $500,000. I think PTC residents are willing to pay for what they get, if you lay it out plain and simple for them. As I said before, I think de-linking the main source of city revenue from the primary users (residents) is a bad idea and will lead to a transfer of government influence from citizens to businesses, many of which could be owned by individuals or shareholders that do not even live here. In any case, based on your last post, Long Live Don Haddix!

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