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Answer: Tax reform, yes; HR 900, no City officials are clear: tax reform in Georgia is needed, but the reforms proposed in HR 900 is not the way to go. As it does every year before its Annual Convention, GMA conducted a survey of city officials. This year the focus was on sources of revenue and state vs. local decision making. Respondents were also asked to indicate the top issues their city faces and whether state officials understand the role of cities in creating a high qualityof life and positive environment for economic development. "We've been doing a survey before our Annual Convention for the past few years," said GMA Executive Director Jim Higdon. "It's fun to do and the results will be discussed and incorporated in numerous sessions during the upcoming Annual Convention in Savannah." In this year's survey, city officials overwhelmingly believe Georgia's state and local revenue structure should be reformed. Nearly 72% believe Georgia's tax code should be reformed, which tracks GMA policy over the last few years that has supported a comprehensive evaluation of the state's tax code. And while they believe reform is needed, an even larger majority of city officials, over 82%, feel that local officials need to remain in the drivers seat when deciding local tax rates to fund their city's needs. Less than 2% of the respondents feel state officials are best suited to determine local tax rates for their community. Although city officials support tax reform, they aren't too enamored with HR 900. As currently written, HR 900 would eliminate most state and local sources of funding and replace them with a flat income tax and a value added tax. Local governments would then receive their funding directly from the state based on a predetermined expenditure level. Sixty-two percent of city officials don't believe their city would receive adequate funding from the state under this proposal while over 56% feel HR 900 would make it more difficult for them to make funding and resource allocation decisions. "There's nothing surprising with these numbers," said Higdon. "City officials are elected to make decisions for their city, period. HR 900 would essentially take away the ability of city officials to shift resources or raise additional revenues to meet locally determined or unexpected needs. This bill would essentially centralize financial decision making at the state level for all local needs and take away the broad and diverse revenue base GMA and the cities of the state have spent years building. I don't see the benefit of that and I don't think Georgia's citizens will see the benefit either." Survey respondents were also asked to indicate what they thought contributed most to the property tax issue in Georgia. Rising assessments were cited by 38% of the respondents with the school share of the property tax bill cited by 32.5%. Seventy-four percent of city officials felt that a Municipal Operations Sales Tax (MOST) would benefit their city. "This also isn't surprising," Higdon said. "Cities in Georgia will need more than $6.5 billion over the next five years to fund needed capital improvements. Water and sewer, transportation, public safety, airports, downtown development, solid waste and parks and recreation needs are all important to the health and vitality of Georgia's cities and serve as the underpinnings to Georgia's high quality-oflife and economic development. City officials want the flexibility to bring various funding options to their citizens that would meet local needs. A MOST should be one option city officials could utilize to meet capital needs and also provide needed property tax relief." Survey respondents were asked to pick the top five issues facing their city . The most overwhelming issue is how to pay for infrastructure improvements and other capital needs, selected by over 87% of the respondents. As in the private sector, health care costs were also a major concern with 58% of city officials indicating it is an important issue. Over 71% of city officials do not feel that state officials understand the role cities play in providing services that create a high quality of-life and a positive environment for economic development, up from 68% last year. Only 13% of the respondents thought state officials appreciate what cities do in these areas, down markedly from nearly 25% last year and 20% the year before. "I don't blame city officials for thinking that," said Higdon. "Take a look at this past legislative session where Georgia annexation laws were again the focus of attack as well as efforts to make deannexation easier. Then you throw in proposals like HR 900 which would render meaningless the concept of local autonomy along with efforts to eliminate red-light cameras and other intrusions on local control, it's no wonder city officials wonder if state officials have any idea of the costs incurred at the local level that are directly associated with Georgia's growth. The efforts city officials undertake on a daily basis are integral to the state's vitality, but the actions the General Assembly takes each year further erodes local control and the ability to respond to real local needs." Have a question? Please contact GMA.
Publisher's note: The previous survey results and comments about proposed ta reforms appeared Jun 20, 2007 on the Georgia Municipal Association website.
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