Atlanta likely to seek extension of 1 percent sales tax to fund sewerage clean-up effort
Editor’s Note: This story has been updated with photos by Kelly Jordan.
By David Pendered
Atlanta voters in March 2020 likely will face a proposal to extend the 1 percent sales tax that pays for upgrading the city’s water and sewer system, following a vote Tuesday at Atlanta City Hall. This would be the first test of public faith in Mayor Keisha Lance Bottoms’ administration since it revealed the sales taxes for Renew Atlanta and transportation will not complete the entire list of projects presented to voters.
The political campaign to extend the water and sewer tax already is taking shape in the Bottoms’ administration, the city’s deputy water commissioner said during the meeting of the Utilities Committee of the Atlanta City Council.
“It’s a priority under the administration,” said Mohamed Balla, a deputy commissioner in the Department of Watershed Management.
By law, governments are not allowed to try to influence voters; governments are allowed to provide information that educates voters. In the past, campaign committees have been created and led by civic leaders who lend their prominence to the proposed extension of the Municipal Option Sales Tax.
Potential opposition could come from voters concerned that they approved sales taxes to fund a wide array of public improvements, only to learn last year of a $410 million gap between the project list present to voters and the city’s ability to fund the projects. The list ultimately was downsized. Wall Street investors have expressed no concerns about the city’s management of the MOST.
Voters on March 24 will face the proposed extension of the 1 percent water and sewer tax, presuming the council approves the measure. That’s the same day Georgia holds its presidential preference primary. The resolution calling the referendum was approved unanimously Tuesday by the council’s Utilities Committee, setting it up for expected approval by the council Nov. 18.
Part of the campaign message will be that water rates are not projected to increase until 2023 if the 1 percent sales tax is extended. The tax generated $145 million in the 2019 fiscal year that ended June 30, Balla said.
Atlanta Councilmember Cleta Winslow emphasized during the meeting that she wants to ensure a robust campaign is conducted to support the tax and get out the vote. Councilmember Joyce Sheperd joined Winslow in noting that the city’s newer residents may not know the extension of the existing tax is important to the city’s plans to not raise rates for water and sewer.
Their concern involves the high number of residents who are new to the city since the last MOST campaign, in 2016. These residents may not be aware that Atlanta has signed a federal consent decree that calls on it to stop polluting the waterways of Georgia. The $4-plus billion sewer and water construction project was devised to respond to the decree. The Chattahoochee Riverkeeper, Inc. was among the plaintiffs who filed a lawsuit to compel the city to stop polluting.
Commissioner Kishia Powell, head of the watershed department, sought to reassure committee members of the administration’s ability to present voters with a compelling case to extend the tax.
Powell noted that Atlanta officials petitioned and won approval from the state Legislature to ask voters to extend the water and sewer sales tax. Atlanta had exhausted its ability under state law to extend the tax, as of the vote in 2016. Lawmakers voted to allow Atlanta to seek an additional extension.
Powell told the committee the administration will present the same materials to voters.
“We share your emphasis and it will be done,” Powell said, referring to an educational campaign. “We want folks to know the Municipal Option Sales Tax makes the most sense, [spelling out] c-e-n-t-s and s-e-n-s-e.”
Terms call for the 1 percent sales to be extended by four years, or until the time $750 million is collected, according to the resolution approved by the Utilities Committee.
The tax is to help pay at least $1.4 billion in federally mandated costs that remain to be completed. That sum will be passed to customers if voters reject the tax, Balla said.
Those projected costs could rise if voters reject the tax, Balla said. The city likely would lose low interest rates on money borrowed to finance the water and sewer upgrade, he said. Investors would demand higher returns if their only source of repayment is the water and sewer bills collected by the city.