The Supreme Court Ruling on TADs

By Arthur E. Ferdinand. Ph.D.
Spring, 2008

The Georgia Supreme Court in an unanimous decision recently ruled the use of school tax revenue for purposes other than education is not allowed under the Georgia Constitution. The
case was argued by Attorney John Woodham who successfully fought to prevent school tax revenue from being used to fund the Beltline Tax Allocation District.

Tax Allocation Districts or TADs are areas designated as underdeveloped or rundown and require a commitment of
property tax revenue to jumpstart development. There are 13
TADs in Fulton County and the City of Atlanta . In most of these TADs, Fulton County , the City of Atlanta , and one or the other of the Fulton Board of Education or the Atlanta Public Schools commit their share of any growth in tax revenue generated in the designated area to the TAD authority.

In 2007, $30M ($29,825,105.64) of Fulton County and City of Atlanta School Boards tax revenue was slated to go to 13 TADs. As a Constitutional Officer of the State of Georgia , I am obligated to follow the simple language of the Court. Consequently, all School tax revenue, which, in the past, the Tax Commissioner's Office forwarded to TADs is now sent to the School Boards. If the School Boards feel obligated to continue to give tax revenue to TADs, they are free to do so.

Tax payers are generally unaware that over 50% of the funding for TADs comes from taxes thought to be going to educate children. There is public disclosure of how much money each School Board wants every year, but there is no annual public disclosure of the amount diverted to fund development. The drafters of the Georgia Constitution felt the education of our children was so important they prohibited the use of school revenues for purposes other than education.

Not a month goes by without us hearing of how cash strapped the schools are. TADs may be contributing to this shortfall. At the same time we hear:

1. Our schools are understaffed and our teachers underpaid;
2. We hear stories of teachers having to buy supplies for their classrooms out of their own pockets;
3. In 2007, college bound seniors ranked fourth from the bottom on a national scale for SAT scores;
4. There is a shortage of books for students. Late fall of 2007 I intervened on behalf of a Fulton County student frustrated because his teacher, his principal, and parents were unable to get pre-calculus text books for his class;
5. Georgia students lose when courses are eliminated and options disappear. Music, Phys. Ed. and Art have been taken off some schools' curriculum.
6. Public schools are losing favor to charter schools and private schools, while children of parents without alternatives to public school sink deeper and deeper into an educational abyss.

The Georgia Constitution is clear on the use of school funds. My position is also quite clear on this issue. I will follow the ruling of the Georgia Supreme Court and no longer willingly forward school tax revenue to TADs. I expect there will be court action, some of it hostile, to compel me to do so. Like most of you, I believe property development is vital to the economy and our quality of life, but like the Georgia Constitution I believe it is of greater importance to develop our children especially when it comes to using money we as citizens earmarked for that purpose. Because when it comes to your money, tax matters.

Arthur E. Ferdinand, Fulton County Tax Commissioner

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