Carson Reintroduces Fractional SPLOST Bill

As he did last year, State Rep. John Carson, a Northeast Cobb Republican, is introducing legislation to provide for a fractional SPLOST, or Special Local Option Sales Tax. It is a county-levied tax for local government purposes that is less than a penny on the dollar amount currently provided for in state law. 

The following is a guest editorial Carson submitted as the new Georgia legislative session began:

I firmly believe in reducing the tax burden on our citizens and increasing accountability in government. This is exactly why I am sponsoring legislation that will allow Georgia’s counties to collect a sales tax at less than one cent.  

Imagine each time you went to the supermarket to pick-up just a few household items for your family, you were instead required to purchase a total of $100 worth of stuff. You would be forced to buy items that were either unneeded or more expensive, possibly both. Our families don’t operate like this, and neither should our government.

Currently, Georgia law allows counties to propose a Special Purpose Local Option Sales Tax (SPLOST) for assessing and collecting a one cent sales tax in the county. Usually lasting four, five or six years, and sometimes shared with cities, the funds collected are used for capital projects such as constructing roads and other infrastructure, local government buildings, and jails. However, a SPLOST is currently required to be one-percent without any flexibility for a lower rate.

While working on this issue in the 2013 General Assembly session, I introduced HB 153 which allows counties to propose a fractional SPLOST tax percentage, meaning less than one cent. Since some counties and cities have well-developed infrastructure, the one-percent rate can raise more revenue than necessary to fund critically needed capital projects.

For example, a one-percent SPLOST in some counties can raise much more than is required for essential infrastructure projects. And because these funds must be spent on capital projects, some counties and cities could create “non-essential projects” to ensure all the revenue is spent. 

These non-essential projects could also require additional maintenance funds, which must come from the county’s general budget, whose funds would be better directed at other important functions like public safety. It’s important to note that this legislation allows an option for a lower rate on future SPLOST referendums and is not a new or additional SPLOST.

Some suggest just shortening the SPLOST’s duration, but this leads to changing sales tax rates more frequently, not to mention that a consistent, lower sales tax rate can lead to more revenue when economic development is factored in later years. According to the non-partisan Tax Foundation, at least 22 of the 37 states that have local option sales taxes allow a fractional rate.

And let’s not forget that Georgia already charges a fractional percentage for gasoline excise tax (7.5 cents per gallon).

If counties chose to reduce their SPLOST rate by, for example, a half of one-percent, this could easily save the average Georgia family $80-100 a year. This bill is co-sponsored by numerous legislators from both parties, and is supported by various county commissioners, the Georgia Tea Party, Americans for Prosperity, several large business associations and numerous taxpayer associations around the state.  This group may seem like strange friends after last summer’s T-SPLOST vote, but we are united behind this fiscally responsible legislation.

I believe this is a necessary tool that would encourage local governments to focus on essential projects while lessening the burden on taxpayers like you and me.  Fractional SPLOST: it makes cents and it makes sense.