The answer, at least in part, is that current state law does not allow the hotel tax to be used to fix a sewer system fouling the Chattahoochee River, transportation improvements or education budgets. Hotel tax money is earmarked for special uses, among them help financing a $1 billion retractable-roof stadium in downtown Atlanta.
The General Assembly could change the law to divert the hotel tax revenues — roughly $42 million a year — for other projects. Gov. Nathan Deal and Atlanta Mayor Kasim Reed couldn’t unilaterally decide to divert the money elsewhere, even if they wanted to. And, at least for now, no one at the Capitol is talking about changing the law to do so.
“We don’t even have a debate going on in the state Capitol,” said state Sen. Vincent Fort (D-Atlanta). “Unless you have a debate, you can’t make decisions about the needs of community folks.”
How officials ultimately spend the money is a telling indicator of where leaders are setting their priorities. Proponents say helping the Falcons build a new stadium reflects economic priorities: They say it would help protect and create jobs, attract out-of-town visitors and their money in the downtown area, encourage development around the sports complex and generate millions in spending.
Even if a new stadium isn’t built, tax dollars would have to be used for maintaining the Georgia Dome. And under every scenario for funding a new complex so far, private investors would foot far more of the cost than taxpayers, Atlanta City Council Member Yolanda Adrean said.
“You cannot overlook the fact that you have the potential to leverage 80 percent private dollars,” she said. “At the same time, you can’t overlook the fact that we have a city that’s woefully underinvested in its infrastructure.”
Deal and team owner Arthur Blank have been negotiating over how much public financing will go toward the new stadium. Regardless of how much money the state ultimately kicks in, the initial plans called for hotel tax revenues to be used to issue bonds to help pay for the stadium. The earliest plans would have required lawmakers to vote on issuing the new debt.
The original plan called for $300 million in bonds, though Deal later asked Blank to reduce that sum to $200 million as it became clear a substantial group of lawmakers felt the politics of voting to approve a deal would be too difficult.
Since then, officials have publicly contemplated whether Atlanta’s city government could issue the bonds, a step bypassing the political obstacles in the General Assembly.
However, the debate over the stadium comes as officials try to figure out how to pay for other pressing needs. Just maintaining Atlanta’s current existing infrastructure would cost about $920 million in a multi-year cycle, according to city finance officials. It faces big bills to upgrade an outdated sewer system that pollutes the Chattahoochee River, an ongoing cost that stood at more than $400 million in mid-2012. Those costs are paid in the form of taxes and water bills.
Reed’s administration has shied away from borrowing money to whittle down the list of general infrastructure needs, focusing more on trimming deficits and building up a reserve fund.
So far, higher taxes haven’t been an option. Over the summer, voters in metro Atlanta rejected an increase in the sales tax that would have funded more than $7 billion in transportation projects, including replacing bridges and expanding bus service.
“I know how the law is currently stated. But Atlanta has a lot of other priorities,” said Baker Owens, who lives downtown and attended a recent forum on the stadium. “... No one is saying, hey, wait a second, maybe we could use some hotel-motel tax money for some kind of transportation project.”