County officials are urging city leaders to approve an agreement between the governments that could create up to $56 million from a new sales tax reserved for transportation needs.
An intergovernmental agreement approved by all city and county governments would allow the county to call a referendum on a new 1% Special Purposed Local Option Sales Tax for transportation (TSPLOST) in Newton County, County Manager Lloyd Kerr said.
Without an agreement, state law requires the sales tax to be imposed at a lower rate and the cities and county risk losing up to 25% of money that could be collected countywide over five years, Kerr said.
The Board of Commissioners met with leaders of cities within Newton County both in person at the Historic Courthouse and online Monday, June 29, to discuss the next step in the process of placing a Special Purpose Local Option Sales Tax for transportation, or TSPLOST, before county voters this year.
Kerr said the cities and county must decide how the money will be shared by July 21 to satisfy the time requirements for placing it on the Nov. 3 ballot.
He said if an agreement is reached and voters approve the tax, a 1% sales tax is estimated to generate between $45.9 million and $56.1 million over five years for road projects both in unincorporated Newton County and within Covington, Mansfield, Newborn, Oxford and Social Circle.
However, without an agreement, state law limits the sales tax to 0.75%. Collections likely would only reach $42 million and a “default” distribution formula would be used to distribute the money based on each city’s transportation expenditures in the three most recent fiscal years, Kerr said.
Kerr also recommended listing non-specific transportation-related areas in which the funds will be used. That method would give the governments more flexibility in using their funds, Kerr said.
It also would allow them to address urgent transportation needs within the five-year period that were not foreseen when the referendum was approved rather than binding them to funding specific projects, he said.
In response, Covington City Councilwoman Hawnethia Williams said she believed voters would be more likely to support the referendum if specific projects were listed rather than listing general categories like “Intersection Improvements” which the county commission chose to do.
Fellow Covington Councilman Don Floyd told a reporter he also believed specific projects should be listed because some past SPLOST referendums featured non-specific project categories and “a lot of times the money that was allocated for particular projects – the projects never showed up,”
“I think it’s going to be very important that the public knows what is proposed to have a chance of passing,” Floyd said.
Covington would receive more than 18% of the proceeds -- up to $10.3 million -- under the proposed revenue-sharing formula.
But Mansfield’s estimated share, .063%, would bring the east Newton County town an estimated $350,000 from the tax which “won’t pave a lot of roads,” said Mansfield City Council member Blair Northen.
He told commissioners a majority of his constituents “seem to be against” a new 1% sales tax for transportation.
However, Northen also said the city has “a need for road improvements” and wanted consideration of a larger share for the town.
“In the event it does pass, I want to do the best I can for the city,” he said.
Oxford Mayor David Eady attended the meeting using the Zoom online platform. After the meeting, he would “be surprised if all the cities didn’t agree” to enter an intergovernmental agreement with the county.
Only Mansfield appeared to have a problem with the revenue-sharing percentages, he said.
The revenue-sharing percentages were based on how revenues are shared from the 2017 SPLOST and the Local Option Sales Tax, also known as LOST, he said.
Oxford Council members “haven’t really had a broad-based discussion” about the city’s involvement in a TSPLOST referendum, he said.
The mayor said the city has tried to include transportation-related initiatives, such as development of walking trails, among the projects it was required to list for voters in past SPLOST referendums.
But city and county leaders met to discuss a TSPLOST referendum before the COVID-19 pandemic led to the shutdown of the economy and its accompanying job layoffs, Eady said.
Voters may be concerned about approving another 1% sales tax when many are struggling to pay their household bills, he said.
In addition, the city council could approve a 2021 property tax rate which would increase homeowners’ tax bills and prompt them to oppose adding a new 1% sales tax, Eady said.
“I think that will factor in,” he said.
County Commissioner Stan Edwards said some roads in Newton County are still unpaved and he wanted to see action taken on them.
“I think we need to pave all roads before anything else,” he said.