Tads And School Districts

This November, the issue of allowing school districts to participate in Tax Allocation Districts (TADs) is up for vote in Georgia. Elsewhere in the United States, these are known as Tax Increment Finance districts (TIFs), but by whatever name, throughout the country, school districts have benefited from participation.

TADs are set up to allow communities to finance such redevelopment and infrastructure costs as environmental cleanup, streetscape improvements and parks that help encourage new development in slow or no growth areas. The money comes from the new taxes generated by new development plus new revenue from the appreciation of existing properties within the district, not from increasing the tax rate on existing development.

TADs are not new. They’ve been around in Georgia for more than 20 years. Up until now, local school boards have had the option of participating in TADs and investing in community redevelopment projects. The 2008 Georgia General Assembly put this referendum on the November ballot because this ability was successfully challenged in the courts. Now it’s up to voters to decide if school boards should have the choice to opt in and participate. What it boils down to is local control.

Voting “Yes” to this referendum on the November ballot will allow Georgia voters “to authorize counties, municipalities and local school boards of education to use tax funds for redevelopment purposes and programs.”

Even if the referendum passes, it will not necessarily mean that a school district will become a part of a TAD. Passage will only give school boards the ability to decide whether or not to participate.

School boards have been savvy negotiators and haven’t automatically opted in to every TAD when asked. For example, in the Princeton Lakes TAD in southwest Atlanta, the Atlanta Public Schools decided not to participate because of an anticipated large increase in the number of single-family homes that would generate large numbers of school-aged children who would have to be served. When school boards decide to invest in a TAD, they usually do so on their own negotiated terms.

Across the state, schools, counties and municipalities have improved blighted areas by stimulating the growth of the tax base through TADs.

As the quality of life in blighted areas improves, the schools improve. As the population in these areas increases, underutilized schools are repopulated, reducing the need to spend taxpayer monies building new schools.

TADS exist for a limited time period, typically 20 to 25 years, after which time the bonds are paid off and the increase in taxes begins to go to the county, municipality and school district.

In addition to the jump in tax revenue when TAD bonds are repaid, here are specific examples of how school districts have benefited from participating in a TAD: Development fees for Cherokee County Schools were forgiven as part of the city of Holly Springs New Town Center TAD; and in Atlanta’s downtown Westside TAD, Atlanta Public Schools received $5 million for the construction of Centennial Place Elementary, built on the site of the former Techwood Homes, plus another $2 million for other capital costs and related facilities.

In the BeltLine TAD (which attracted the litigation that led to the need for this referendum), the Atlanta Public Schools district had successfully negotiated for: up to $10 million for the construction of recreational facilities or athletic fields at school sites within the BeltLine Redevelopment Area; subsidized or free transit rides for APS students; payments totaling $150 million for educational programming paid in $7.5 million annual installments in years six through 25 of the life of the TAD; preferences in the use of the TAD bond-funded BeltLine Affordable Housing; and a trust fund for the benefit of educators and staff employed by APS.

More than 20 years ago, Georgia voters gave rise to TADs by supporting the Redevelopment Powers Law; nationally, 49 states authorize the use of tax increment financing. More than 50 Georgia cities have approved the use of TADs; some 20 communities across the state have TADs in various stages of development.

Georgians have made it clear that they want their governments – including school boards – to have a redevelopment tool to attract investment and jobs to neglected communities and corridors long ignored by the marketplace. TADs are an economic development tool that sparks investment and brings jobs to Georgia.

Vote “yes” in November to ensure that your local school district will have the choice to partner in a TAD with your city and county to improve the communities surrounding your schools.

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