Dear Editor,
Putnam County Commission Chairman Bill Sharp has said that SPLOST No. 10 is “just” a renewal of the penny sales tax. It is anything but just a renewal.
Approval of the SPLOST referendum on the November ballot includes approval for the County to issue exactly $32,637,752 worth of new General Obligation Bonds. This would be the FIRST TIME in over two decades of the sales tax that bonds are to be issued. Why now?
The Resolution providing for the referendum was rushed through at the last minute. At least four different versions of the resolution have been presented, causing the Board of Elections and Registration (BER) to publish a corrected version of the ballot question. Even the final version of the resolution contains misleading and potentially flawed language.
How does one issue $752 worth of bonds if bonds are issued in $1,000 denominations? The resolution provides that the city is to receive 31% of the tax collections; however, the project list allocates only 25% to the city – a difference of some $2.5 million over six years. Will the city sue the county to get its total share?
The resolution provides $8,680,253 for a new jail – long overdue; however, the allocation for the jail is not based on an accurate estimate but rather on the presumption that a “level one county-wide” project is entitled to 20% of the anticipated collections. Nowhere in the Code (O.C.G.A. 48-8-115) does it mention a 20% allocation.
Issuing bonds to pay for capital projects could make good fiscal sense, provided two criteria are met: one major project requires most of the bond yield, and the bond debt can be paid through the sales tax. Given 12 different county projects and the probable overestimation of sales tax collections, neither of the criteria appears to be met. Incidentally, the project list does not allocate new pickleball courts.
If the objective of issuing bonds is to deposit the proceeds to earn more interest than would be paid on the bonds, the county might check the IRS arbitrage rules (IRC 1.148-2(e)(2)). In part, the rule requires that 85% of the bond yield be spent within three years.
Let me be clear: I favor most of the proposed projects. My concerns are the haste to place the issue on the November ballot and the issuance of more debt, which, together with the $22 million worth of bonds already sold, may lead to an increase in property tax.
In my view, it would be far better to withdraw the referendum on SPLOST No. 10 from the November ballot and place the question on a March 2025 ballot. This would allow time to obtain more accurate project estimates, construct a proper resolution, consider whether to issue more debt, and seat Districts 1 and 2 commissioners.
Any additional cost for a March 2025 election has already been included in the BER budget for FY25.
The resolution's passage in March 2025 would allow for a seamless sales tax continuation. While there may be more voters in November, those voters who cast a ballot in a March 2025 election would be far better informed.
Stephen Hersey, District Three Commissioner