Richmond County considers sales tax increase

SPLOST, meet MOST.

In what could solve the city's financial woes for years to come, City Administrator Fred Russell recommended Thursday to Augusta commissioners that they start a push to add an extra penny to the sales tax.

The proposal would have Augusta, like Atlanta, collecting a Municipal Option Sales Tax, or MOST.

Raising the sales tax from 7 cents per dollar to 8 cents would generate an estimated $35 million to $36 million per year. If approved by the Legislature and Augusta voters next year, collections could begin by fall, plugging the 2010 budget deficit and staving off a tax increase.

In 2011, the tax rate on homeowners could be rolled back three mills, reducing taxes on a $100,000 home by $105, according to figures Mr. Russell presented at a budget hearing.

Commissioner Don Grantham said the first step would be for the commission to pass a resolution, calling on the city's legislative delegation to get a special law passed in Atlanta allowing Augusta to hold a MOST referendum.

Should that be done during the 2010 General Assembly, a vote could be held as early as July 20, Richmond County Board of Elections Executive Director Lynn Bailey said.

If approved, the tax could begin the first day of the first fiscal quarter, 80 days after the vote, which would be Oct. 1, Assistant Finance Director Tim Schroer said.

The tax would likely generate about $3 million per month, adding $9 million to the city's coffers next year, Mr. Schroer said. The working 2010 budget currently has an $8.6 million shortfall.

Commissioner Corey Johnson said he'll support a MOST, and he thinks the commission will, too.

"I think it's going to probably be a way that we stay afloat," he said.

The sales tax in Augusta is 7 percent -- four pennies for the state; a penny for the school board; a special-purpose, or SPLOST, penny for designated projects; and the local-option sales tax, or LOST, penny to offset property taxes. LOST revenues being down are a major reason for next year's dismal financial projections.

Mr. Russell told commissioners Tuesday that, while they pursue a new penny tax, in the meantime they should consider a list of other revenue-raising and cost-cutting measures to balance the 2010 budget.

When he unveiled the numbers last month, he recommended a 1.317 millage increase -- adding $46.10 to the bill on a $100,000 house -- raising bus fares and cutting transit services, cutting outside agency appropriations by 15 percent and closing the Augusta Municipal Golf Course, known as "the Patch."

Mr. Russell presented an alternative plan Thursday that would make up for the $5.9 million shortfall in law enforcement, requiring only a 0.1 mill increase for street lights, but still requiring cuts to transit, fare hikes and closing the golf course.

That plan includes routing $600,000 per year in beer taxes away from the Augusta-Richmond County Coliseum Authority, generating $200,000 per year though Tax Commissioner Steven Kendrick stepping up efforts to collect delinquent taxes, and saving $650,000 per year through a new employee retirement incentive program, passed by the commission later in the day.

Mr. Russell said furloughing employees, including public officials and road patrol deputies, would save $202,590 per day on paper, but may offer no real savings because the workload would remain the same and the city could wind up paying overtime.

The administrator's presentation took up most of the hourlong hearing, and the only member of the public who asked to speak was civic activist Woody Merry, founder of CSRA Help. He presented a list of ways to save money, such as privatizing the golf course and the Procurement Department, putting an end to unneeded feasibility studies, re-examining tax exempt properties and going after delinquent taxpayers.

Mr. Merry was given four minutes to speak, and when Mr. Russell told him time was up, he wouldn't quit. He continued shouting after Mayor Deke Copenhaver adjourned the hearing.

In return for Mr. Merry's simple battery charge involving former coliseum authority member Bill Fennoy being placed aside last year, Mr. Merry agreed to behave at future public meetings. Solicitor Harold Jones said he'll re-read the order today and look into whether Mr. Merry violated that provision Thursday.

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.

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