County deals with loss of state money
Because the governor and state legislators decided to promote industry in the state by giving an exemption on the energy consumption tax to industry, local government is facing a shortfall.
According to Columbia County Administrator Scott Johnson, buying power is just like buying a drink at a convenience store, in that you pay the seven percent sales tax. Of that seven cents, four goes to the state, a penny goes to the Local Option Sales Tax (LOST) that the county uses to offset property taxes, a penny goes to the Special Purpose Local Option Sales Tax (SPLOST) that the county uses for projects and a penny goes for schools.
Legally, the state couldn’t take the education penny, but in that effort to promote industry, they decided to take everything else, including the two cents due the county.
“The law was, ‘We’re going to go ahead and take all six cents off, but if a local government decides they can’t live without those extra two cents, then they have the option of instituting what’s called an energy excise tax,’” Johnson said.
In other words, they took away local government’s money and then made them go back and institute a new tax to get it back, which Johnson said didn’t necessarily equate to a lot of money in the grand scheme of things — probably around a quarter of a million dollars over the four year phase in period — but one cent of that two cents was LOST money that goes directly into the general fund to offset property taxes.
“If we didn’t have that LOST money in there to balance the budget, potentially we would have to go up on property taxes,” Johnson said. That move would be politically very unpopular, since Columbia County has reduced the property tax millage rate four out of the last five years. But to make up for the lost revenue, the county would have to either raise taxes or cut spending, which would mean a loss in services that would be equally unpopular.
“While we want to give industry as much as we can give them, we can’t do that on the property taxpayer’s back,” Johnson continued. “It’s not fair for your taxes on your house to go up so a large corporation doesn’t have to pay what they were paying before.”
If the state’s in the position to be able to not collect that four percent, he said, then the county is in favor of the industries getting that four percent, but what they’re not in favor of is the legislature taking away the two percent that belongs to the county.
Therefore, the county is preparing to get its two cents by implementing the energy excise tax. The first step is the intergovernmental approval from Harlem and Grovetown followed by an ordinance change.
And though some argue that deflecting that two percent back to industry will drive that industry somewhere where they can get the full benefit of the exemption, Johnson argued that Columbia County’s low property tax might offset such a reaction.
“You can’t just focus on the energy tax and think it’s going to save you money on your bottom line,” he said. “Because at the end of the day, your bottom line is made up of many things, not just one rebate of a tax.”
Despite the frustrations, Johnson said the county has a good relationship with the industry located in the county and applauds the state for helping.
“What they did, they did with good intentions, I think, but with unintended consequences,” he said. “Any time you start taking local revenues away at the state level, certainly the county government is going to stand up and say, ‘This isn’t right.’” You Might Also Like: