Are Tax Allocation Districts the key to solving Atlanta’s economic mobility issues? Or are they the force behind inequality itself?
Well, the answer depends on who you ask. But the questions are core to the looming debate around Tax Allocation Districts (TADs) as the mayor’s office tries to extend the city’s eight existing TADs until 2055.
If all goes according to Mayor Andre Dickens’ plan, the TADs will fund an ambitious $5 billion neighborhood reinvestment initiative in the most neglected parts of the city.
But it’s not so simple. The TADs have drawn opposition, particularly from groups like the Fulton County Commission, whose members argued the model diverted funds from essential services and contributed to gentrification. In response, the city has doubled down on its plan.
Atlanta’s Center for Civic Innovation (CCI) has set out to clear the muddy waters around TADs and answer the “multi-billion dollar question:” Should the city extend its Tax Allocation Districts?
Over the next few months, CCI will host several community town halls across the city – The Southwest TAD Talk on Mar. 25, the Southeast TAD Talk on Apr. 14 and the Westside TAD Talk on May 7.
The center held its first TAD talk on Feb. 19 at the CCI headquarters on Edgewood Avenue. Residents packed into the room for “TADs 101,” open conversation and activities centered around the incremental tax system.
“We’re genuine in our desire to make sure that as many people as possible can have information about what this means and how it works,” CCI Executive Director Rohit Malhotra said. “More importantly, also amplifying what we don’t know so that we can get more information.”
Malhotra is careful to emphasize that CCI isn’t taking a stance on the Tax Allocation Districts. Instead, he wants to create a “forum and place for curiosity and discussion.”
“Where there are complex policy challenges the city is navigating, the Center for Civic Innovation has always tried to play a role that amplifies information to the public,” Malhotra said.
It starts with explaining the Tax Allocation Districts to the public. Malhotra said many people didn’t know how the districts even worked, including city employees. At the first TAD talk, the crowd spent 45 minutes just trying to determine what a TAD could even pay for. It’s the kind of “101” the center can provide.
Currently, Metro Atlanta ranks 50th out of the top 50 metro areas when it comes to economic upward mobility. That’s according to Harvard University’s Raj Chetty and his research group Opportunity Insights’ economic mobility study.
The data galvanized the city, and economic mobility has been core to the mayor’s agenda. Malhotra said that’s a good thing, but the cause is being used to justify Tax Allocation District extensions.
“That’s where I have questions,” he said.
The Tax Allocation Districts freeze the base property tax value in a given area. For the rest of the TAD’s duration, any increase in the tax revenue or “increment” will be redirected towards redevelopment.
If extended, the baseline tax value would remain, and the ongoing tax revenue increase would continue to go towards TAD projects like the neighborhood reinvestment plan. Basically, TADs are used as an “injection” to incentivize growth.
Previously, Chief Policy Officer and senior advisor to the mayor, Courtney English, has pushed the plan as a way to create “balanced growth.”
“We are moving aggressively to move this strategy,” English said. “We can’t wait. Now is the time when we have a mayor and a council that’s forward thinking.”
Malhotra said he agrees with the premise of an urgent need to solve inequality, but the TAD solution isn’t necessarily a given.
“It is urgent and moral to address widening inequality and disparity in Atlanta that has been going on for a long time,” Malhotra said. “It’s fair to question what approaches are most effective at delivering those results.”
There are some lingering questions from the Center for Civic Innovation, and the crowd at the Feb. 19 TAD talk echoed them: Is increasing property value a driver of economic mobility? Is there data to support TADs as an economic tool?
“If they’re saying we need to start investing now, and I actually think that is a reasonable thing for a government to say, that we want to make investments in neighborhoods and communities, particularly those who have been disinvested in the past,” Malhotra said. “Now, the question becomes, should we use this specific incremental tax tool?”
Malhotra said these are the questions he hopes the city will answer, instead of pushing forward with a default position. The executive director is particularly concerned that the plan could “let the bottom pop” and solve inequality by pushing out people who can’t afford to live in the city anymore.
“What I’m saying is make sure you have data before you make policy decisions,” Malhotra said.
Still, Malhotra said if the data did point to TADs as the “answer” to inequality, that would be fine. “There could be an argument that says yes, this is the most effective approach,” he said.
He hopes the TAD town halls can be a way to dissect that analysis. He also hopes there can be a way to pressure test the policy.
“People have a presumption that with organizations like ours, curiosity is an adversarial position, and it’s not,” Malhotra said. “I think that good public policy is the arbitration of complex ideas, of pressure testing hypotheses.”
