Senator questions legality of Cobb tax incentives
by Jon Gillooly
December 16, 2013 03:49 PM | 5411 views | 12 12 comments | 53 53 recommendations | email to a friend | print
The Riverwalk development planned for Cobb Parkway and Cumberland Boulevard in the Cumberland Community Improvement District will contain 236 condos, 14 three-story townhomes and a 10-story office tower. Riverwalk would also mark the first time county leaders can recall that an apartment project has received a tax abatement.<br>Special to the MDJ
The Riverwalk development planned for Cobb Parkway and Cumberland Boulevard in the Cumberland Community Improvement District will contain 236 condos, 14 three-story townhomes and a 10-story office tower. Riverwalk would also mark the first time county leaders can recall that an apartment project has received a tax abatement.
Special to the MDJ
MARIETTA — State Sen. Lindsey Tippins wants to know if the Georgia Constitution allows a county agency to give tax breaks to developers without input from the school system when those special tax deals slash future school revenue.

Tippins (R-west Cobb) asked county Chairman Tim Lee for a legal opinion on the controversial topic during Monday’s legislative breakfast between lawmakers and the Board of Commissioners, held at the senior center off Powder Springs Street.

The Development Authority of Cobb County, an unelected board whose members are appointed by commissioners, has granted 10-year tax abatement to the proposed $103 million “Riverwalk” apartment and office project planned for the Cumberland/Galleria area by mega-developer John Williams.

“From a school board perspective, has there been a legal study done on the constitutionality of the Development Authority exempting property from the collection of taxes by the school board, who has no appointive powers over the authority nor input into the decision?” Tippins asked Lee.

Tippins chairs the Senate Education Committee and is a former chairman of the Cobb Board of Education.

Lee said he was not aware of any such opinion, prompting Tippins to ask for one. Lee said he didn’t mind ordering a legal opinion, “as long as we understand that the whole purpose of the Development Authority and what it does is to be competitive in economic development.”

Is it constitutional?

Tippins said he fully supports the county being competitive.

“But I believe local school boards are given the authority to collect taxes for the local Board of Education, and I’m not sure an authority that they have no appointment or no hand in appointing or no input into the process can take over their constitutional authority to collect taxes, and I’d like to see a legal opinion,” he said.

Roughly two thirds of the taxes collected go to the school board while one third goes to the Board of Commissioners, Tippins said.

“The county commissioners who collect a third by their action of appointing the authority (members) preclude the other party (school board) from collecting the majority of the funds. I question whether that’s legal,” Tippins said.

Just because a law is passed doesn’t mean it’s constitutional, Tippins said.

“The digest is pretty well spelled out by the county assessor, and to exempt property from that digest that the school board has constitutional authority to collect against, to exempt part of those properties without input from the school board, I’m not sure that’s in the best interest of Cobb County,” Tippins said.

State Sen. Hunter Hill (R-Smyrna), who was also at the breakfast, agreed with Tippins that a legal opinion was needed. Hill said most times the Development Authority will award tax breaks if the proposed development has met the county’s guidelines. The controversy over Williams’ development comes from Lee saying this development does not meet county guidelines for incentives, yet the Development Authority is granting a tax break anyway.

“So to the point of the school board, maybe that should be looked at too, where the school board gets to put members of the Development Authority on the board,” Hill said.

Wilkerson wants accountability

State Rep. David Wilkerson (D-Austell) asked to meet with Lee about the relationship between the Development Authority and commissioners and who has the final decision on granting the tax breaks.

“As an elected official I always think the best end point should be someone who is accountable to the taxpayers,” Wilkerson told Lee.

Lee said he had already been reflecting on Wilkerson’s “excellent” question.

“It’s been something I’ve been giving a lot of consideration to in the last couple weeks as (the MDJ) needs to fill pages for (its) paper. I think having a sit-down conversation is good to have,” Lee said.

Lee went on to note how Development Authority officials will appear before Cobb Superior Court Senior Judge Mike Stoddard this morning for a bond validation hearing — the final step before the authority awards the tax breaks.

“It goes to a judge who, by definition, can’t follow popular demand and say, ‘well, there’s an uproar in the MDJ about this. I’m not going to pass it through,’” Lee said.

Like Wilkerson, Hill believes the final decision to award tax breaks should rest with commissioners, not the unelected Development Authority chaired by Vinings Bank executive Clark Hungerford.

“Boy, do we ever potentially need to look at that at the state level because it offers so much authority for the giving out of tax breaks and elected officials aren’t ultimately on the hook for it when they probably should be,” Hill said. “There should be an appeals process that allows for people to at least have a chance to overturn the argument.”

Hill said there’s not a lawmaker in Cobb who is opposed to smart growth.

“But when there is a financially viable project that can take place without government subsides, then it should,” Hill said. “That’s really all we’re talking about. It shouldn’t be a situation where we’re just helping a development to be more advantageous for somebody as opposed to legitimately getting a development that would otherwise be dead off the ground.”

Lee said he planned to follow up with Tippins and Wilkerson on their requests in January.

Comments-icon Post a Comment
Flawed Logic
December 17, 2013
Will someone explain how a condo/town home development qualifies as a "job creator?"

Think that the law contemplated businesses, not residential.
Senior tax repeal
December 17, 2013
Well, the board wants to seniors to pay their taxes so pay up! The board has expressed that the senior tax needs to be repealed and they should have a say because it is a huge loss. No one should be exempt from school taxes. NO ONE!
December 17, 2013
Not certain which board you are referencing;

The school board has no authority over the senior school property tax exemption.

If that is the battle you choose, you need to speak with your state representatives and senators within Cobb.
December 17, 2013
Looks like Cobb County board of commissioners are on the hook for a lot of back taxes owed to the school system why did Chuck Clay let this happen is he guilty of malpractice and malfeasance?
Joe B.Low
December 17, 2013
Seniors need to be school tax exempt. Anyone that says no then they are below retirement age. Seniors have paid their entire life towards school taxes regardless if we have children or not private school or not. Seniors should be exempt of all taxes. Let the youth pay for it now. More people visiting Cobb the county will generate more than enough money to pay it back and more. Give tax relief to anyone building anything to bring people and home buyers to our county.
Pay Up Seniors
December 17, 2013
You are exactly right @Senior tax repeal, it is time to do away with the senior tax exemption and other special interest exemptions!
Kennesaw Resident
December 17, 2013
@ Joe B. Low, you can't be serious. The United States spends 2.4 times more on the elderly than on the young. Seniors have had their entire lives to save for their retirement and should not depend on others to subsidize it - especially the young. There are actually more young people living in poverty now, than there were seniors in poverty when Medicare was enacted.

In 2009, households headed by adults ages 65 and older possessed 42% more net worth than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by younger adults moved in the opposite direction. In 2009, households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts had in 1984.

It is time for seniors to share the wealth!
December 17, 2013
The RINO that stole Christmas from Cobb school children Tim and the chamber will have a Christmas party I think they will pass out lumps of coal to some of you street urchins if you stop by the Cobb Chamber Georgia Power has a lot of left over coal than they can write it off as gifts.
December 17, 2013
My point exactly how can the commissioner’s steal fees or taxes from school children the super-rich RINO’s Republicans have waged a war on our children right here in Cobb County. Tm Lee has a legal obligation to the tax payer and sounds like some of these dealings border on RICO laws violation for sure this is something the state legislature needs bring light to. We need a lawyer on our side not the super-rich looks like all the judges are in the bag as well.


Cobb School Advocate
December 16, 2013
Listen to Lindsey !
December 16, 2013
So, an unelected board can waive property taxes so new residents won't pay for schools their children will attend.

Michelle Sollicito
December 17, 2013
It seems crazy that it is possible for the Commissioners to provide a tax break without even informing the School Board they are doing so. I think the decision should be reversed completely. Now that the Braves Stadium deal is official, we could find a lot of developers who would gladly pay the taxes on that land!
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