In broad strokes, individuals in America pay five different kinds of taxes.
Income and payroll taxes primarily support the federal government.
Sales taxes primarily support state governments, and property taxes primarily support local governments.
Excise taxes are basically forms of price fixing by governments to insure success of their favorites over the competition. All levels of government profit from excise taxes and their siblings, licenses and fees.
Also, everyone pays up to 54 percent of gasoline costs in taxes, with both Georgia and Chatham County getting a cut. This weighs most heavily on those who are dependent on the private automobile.
Regardless of the type of tax, individual taxpayers need to appreciate that the entire tax burden eventually falls to them. You are routinely taxed multiple times for the same goods and services.
Relentless taxation weighs most heavily on those who can least afford it, and these are the very people who are increasingly priced out of the services their taxes help to fund. For the elderly, poor, and those on fixed incomes, omnipresent sales taxes eat disposable income, so that basic amenities like housing and food become unaffordable.
In a special election coming only six weeks before the general election in November, this Sept. 19 you will be asked to vote on two sales taxes -- specifically, whether to renew the sixth penny you pay on food and goods, and on a proposed seventh penny primarily to fund new school construction.
Individual municipalities generally tax food in local sales taxes of two to three percent. The two percent sales tax you now pay on food goes to Chatham County. (Four cents of your sales tax goes to the state.)
If the Special Purpose Local Option Sales Tax is defeated on Sept. 19, the sales tax in Chatham County will go down to five cents in 2008, dropping the tax on food to a penny.
Here’s a look at the recent history of sales taxes in Chatham County, with some accompanying photos that tell another story: The story of how your government has spent your money so far.
Have they been responsible stewards in the past? Do they deserve your further trust in the future? Only you can be the judge, and your opportunity to render a verdict comes on Tuesday.
Local Option Sales Tax (LOST) -- the 5th penny
Savannah’s first “Local Option Sales Tax” passed in 1976 to fund Operations & Maintenance and has no expiration date. This accounts for the fifth cent on each dollar you spend.
SPLOST -- the 6th penny
The Special Purpose Local Option Sales Taxes has been renewed by voters every four years since 1985. SPLOST IV is set to expire in 2008. SPLOSTs were designed to fund capital improvements in roads, drainage, recreation, economic development and civic projects. They cannot be used to pay for ongoing operations and maintenance, even on the projects they spawn. In Chatham County, this one-cent tax reappeared on the ballot in 1989, 1993, 1998 and 2003. Currently, the government and Chamber of Commerce want voters to approve SPLOST V, primarily for expansion of jail facilities, an arena, and debt service on general obligation bonds. SPLOST V would commit voters to six rather than four years and would not expire until 2014.
E(ducation)-SPLOST -- the 7th penny?
This is a proposed new sales tax. If you agree to SPLOST V and E-SPLOST, sales tax will rise to 7 cents. This new tax would apply to food and gasoline as well as most retail items. The government and Chamber of Commerce also want you to pay a seventh cent of sales tax, supposedly for education. This tax would only fund construction of new schools, renovation of existing facilities, technology or buses -- not teacher salaries, supplies, or operating expenses. In other words, neither students nor teachers will benefit from this mislabeled tax. If you choose to spend your money growing buildings instead of children, you will get what you deserve when the children grow up and the buildings fall down. But I digress.
(1985-1989 and 1989-1993)
All $279 million went to roads, as was promised in the sales pitch. That got voters used to the additional penny. SPLOST II (1993-1998) brought $229 million over four years. This Son of SPLOST expanded commissioners’ options to allow for $84 million for the Trade Center on Hutchinson Island (37 percent) and $47 million for “Other,” which included more Hutchinson Island expenditures in a general water/sewage category. Roads got $69 million. $19 million went to recreational/cultural, and only $10 million went for drainage.
SPLOST III (1998-2003)
This SPLOST generated a total of $230 million over four years. After severe flooding in 1999, SPLOST III allocated $146 million to drainage. $42 million was spent for roads, $33 million for “Other Capital Outlay”, and $9 million for open space/greenways.
In 2003, voters passed another four years of extra sales tax with SPLOST IV. This is why we’re paying six instead of five cents now. With SPLOST IV, the fund for projected revenues widened to $229 million of a projected $276 million (83 percent). This is lumped under “Other Capital Outlay Projects.” In SPLOST IV $47 million was allocated to roads. Collections started October 1, 2003. Compare this with SPLOST III (1998-2003), in which the slush fund was only $29 million or 13 percent.
SPLOST V -- the future?
SPLOST V, which comes up for voter consideration this Sept. 19, is being marketed for two large capital outlay projects. According to Ballot Information for the election, the SPLOST penny is expected to generate $445,300,000 over the six years from 2008 to 2013. However, these projections do not reflect the downward trend in consumer spending. Also, commissioners are not obligated to spend SPLOST money as promised, especially if revenues don’t meet expectations. At a projected cost of $109,000,000, a “Detention Facility Expansion” including debt service on general obligation bonds, is only the second largest funding package on the ballot, but is given level one priority. $160,000,000 is earmarked for the City of Savannah’s arena and other odds and ends, like drainage and street lighting. The County hopes another $39,000,000 will pay for a Judicial Courthouse, Juvenile Court Complex and Health Department facilities. SPLOST is still paying for improvements on Hutchinson Island, and $18,000,000 is allocated for that and a couple of community centers.