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Car rental tax:
Visitors should not be charged for our wants
 

Editorial by Jim Wooten
Copyright 1996 Atlanta Journal-Constitution
Article date: July 17, 1996
 

People who rent cars in Marietta will pay the cost of restoring an antebellum house downtown because the city of Atlanta wanted to tax travelers to overfund sports arena-related improvements for a team that just signed a basketball player to a five-year, $56 million contract.

Asking visitors to pay an additional 3 percent when they rent Fords, Chevrolets and the like to help provide a workplace for a fellow who will be paid $56 million is an awful lot to ask.

That's what we're doing. In terms of taxes authorized, the tax on rental cars imposed this year by the General Assembly will make the Atlanta Hawks sports arena project in Downtown Atlanta the most expensive facility ever built in Georgia.

Here's how: Technically, the new Atlanta Hawks basketball arena will be owned by the Atlanta-Fulton County Recreation Authority. Debt retirement and public improvements associated with a new Hawks arena will cost about $75 million. Turner Broadcasting System, the Hawks' parent, will pay $17 million. The other $58 million will come from a tax on cars and minivans at Hartsfield Atlanta International Airport, which is expected to generate $5.2 million the first year.

The debt, with this revenue stream, could be retired in 16 years. The General Assembly, however, authorized the tax for 42 years. Atlanta, therefore, should collect $300 million in taxes to retire $58 million in debt.

What's more, legislators agreed that while Atlanta and College Park, where the airport is located, would initiate the tax, it could be levied statewide. The result is that other cities are rushing to assemble a wish list of projects for unsuspecting visitors to
finance over the next 42 years.

In addition to Atlanta and College Park, city officials in Chamblee, Hapeville and now Marietta have levied the tax. Marietta will use the taxes it imposes on visitors to renovate Brumby Hall, which is located adjacent to the taxpayers' hotel, the Marietta
Conference Center & Resort.

Many things are wrong with this picture.

One is that the absolute cheapest way to finance public improvements is to pay cash and build them. The second is to get voters' permission issue general obligation bonds to pay for the project, and then to retire the debt the same way homeowners retire the mortgage.

The least desirable way is the one chosen by the General Assembly: to impose a special-purpose tax.

Local officials now have a cash cow. Any politician or bureaucrat who, with this kind of cash flow and this lack of accountability, can't find a good-paying job for a dimwitted nephew is a low-down dirty dog.

Once on the books, it is inevitable that local officials will impose a car rental tax to fund "special projects." It's the taxing philosophy that has scattered the convention trade in mad flight from New York City a tax the visitor to benefit the homefolk.

I hate that philosophy. It employs government to take advantage of people's vulnerability when they are on your turf and do not have the option of making other choices.

If a "special project" is worth doing, it's worth taxing the people who make the decisions and enjoy the benefits a not voiceless, defenseless visitors.

Jim Wooten is the Journal's editorial page editor. His column runs on Wednesday, Friday and Sunday.
 

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