Extra Sales-Tax Penny Put On Hold

Local delegation says timing off

By Johnny Edwards and Walter Jones
Staff Writers
The Augusta Chronicle
January 29,2010

ATLANTA --- MOST is toast -- this year, anyway.

Augusta's legislative delegation has decided not to push for a Municipal Option Sales Tax in this year's General Assembly session, according to delegation Chairman Rep. Quincy Murphy. A measure allowing Augusta to collect an eighth sales-tax penny would require approval in the House and the Senate, then the governor's signature.

Murphy said Thursday that, based on conversations with members of the House leadership, the delegation concluded the timing is wrong.

"Considering what we're going to be dealing with here in Atlanta, it's just not a good time to go to our colleagues with that," Murphy said.

The Augusta Commission passed a resolution last week asking the delegation to sponsor a bill allowing voters to decide, by referendum in July or November, whether the tax should be imposed. MOST was floated last year as a way to solve the city's budget woes for years to come, maintaining city services without a need to raise property taxes.

Complicating the discussion is the fact that Augusta already has the maximum of two existing sales taxes that take one cent each per dollar of sale.

Adding another would not be as simple as passing so-called local legislation that only requires an OK from the majority of the local House and Senate delegation.

To exceed the maximum, the delegation would have to introduce a general bill that would apply statewide, requiring a vote by the whole House. Tax-increase votes are never easy in an election year, but the state's leaders also want to pass a statewide sales tax for transportation.

In conversations with those leaders and legislators outside the delegation, Murphy sensed Augusta's proposal would stall.

Augusta's proposed tax had the potential to loosen up a tight 2010 budget, adding about $9 million to Augusta's coffers before year's end if voters had approved it in July, and allowing for a 3-mill property-tax rollback.

Without banking on MOST, City Administrator Fred Russell managed to present a balanced 2010 budget with no tax increase, plugging an initial $8.6 million shortfall. The new tax might have alleviated the need for such measures as employee furloughs days and $1 million in cuts to the sheriff's office.

"It doesn't affect us at all," Mayor Deke Copenhaver said of the delegation's decision. "It would have been a nice option to have."

Commissioner Don Grantham, one of MOST's main proponents, said he's not giving up on getting approval for a vote on some form of penny sales tax before the legislative session ends. He said the commission might have been misinformed on what could legally be done, with some of the allowances of MOST being mixed up with what's permitted under the Local Option Sales Tax, or LOST, which Augusta already has.

"I just don't think our Law Department did their homework," he said.

Commissioner Bill Lockett, who voted against the resolution on Jan. 19, said he's pleased. The tax would harm the poor and seniors on fixed incomes far more than 3 mills hurts property owners, he said.

"Who is that penny going to impact most adversely?" he said. "Poor people, because they're going to be able to buy less at higher prices. What you're doing is robbing Peter to pay Paul."

http://chronicle.augusta.com/news/government/2010-01-29/extra-sales-tax-penny-put-hold?v=1264730044

The Augusta Chronicle ©2010 Morris Communications, LLC. All Rights Reserved.