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42-year car rental tax affects the entire state
 

Editorial
Copyright 1996 Atlanta Journal-Constitution
Article date: February 12, 1996
 

The attention focused on Atlanta's effort to tax somebody else to pay for improvements associated with keeping the Atlanta Hawks basketball team downtown ignores two fairly consequential realities that impact all Georgians who rent cars or
vans anywhere in the state.

This is not just an Atlanta and College Park tax. There's no way to draft a law to apply only to those two cities. The standard approach is to put a population threshold in legislation intended to address a problem in one or two cities or counties. But
Atlanta has a population of 400,000, and College Park has a population of 25,000. The alternative, therefore, is to pass a bill with statewide application, meaning that all counties and larger municipalities will be able to impose a 3 percent tax on car or van rentals.

Authority to impose the tax will remain on the books for 42 years. That is, frankly, far longer than the useful life of any sports facility ever built in this state to accommodate a professional team. While we understand that this tax is to be imposed for a variety of public improvements, to include parking decks, in connection with a range of convention, trade, sports and recreational facilities, it means that off- budget debt can be incurred for longer than the useful life of facilities financed.

Too, while the tax can expire earlier, the reality is that it won't. In 15 or 20 years, the beneficiaries will quietly slip legislation through the General Assembly to prolong it forever.

One more objection: While the tax could expire earlier than the year 2038 if the debt is paid off, there's no incentive to pay for improvements early. The temptation, in fact, is to pad the payrolls or take on additional spending projects to stretch out the
taxing authority because, in essence, it's free money without a constituency of payers to demand accountability.

The cleanest way to have made the improvements Atlanta wants for the Hawks is to hold a public referendum for permission to float general obligation bonds, which could be paid off in 15 or 20 years. It's the cheapest, cleanest alternative to paying cash.'

This car rental tax bill is a high price, indeed, to pay for a sports franchise. Before this tax expires, if it ever does, Georgians all over the state will have paid what we would guess to be hundreds of millions of dollars. This from legislation that started out to
provide a few million dollars worth of public improvements in one city.
 

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