Is a school SPLOST good for business?

When I was a student, in my late teens, I wanted a summer job. I needed money and I had my eyes on getting a car. These summer jobs were not exactly easy to get. One summer the only job I could get was a janitorial job, cleaning government offices as part of a crew from midnight to 8 in the morning five days a week. This nightshift work was rough!

The other members of the crew were career employees. One night, as we were handling some sort of chemical cleaning agent out of a barrel with skull and bones on a red warning label, my boss asked me to read the text on the label for him. That’s when it dawned on me that this man could not read. Here he was, handling dangerous stuff, and he simply could not read. He was illiterate.

That’s the day, or the night, when it was revealed to me that we all have a stake in education. If the guy who fixes the brakes on your car can’t read the directions on how to install brake shoe pads (or whatever), who’s in trouble? You and whomever you hit.

Employers are often heard to complain about not finding employees who can perform simple tasks that school should have prepared them for. In the end, we are all dependent on each other, and perhaps never more so than in elections with delicate choices.

There is a school of thought that holds that parents who bring children into the world are the ones responsible for their education. My response to that is that we all benefit from each other’s education, so perhaps we should all contribute.

That, to me, means that businesses who depend on an educated workforce for their operation should contribute as much as individuals or parents. Wal-Mart and Home Depot should contribute if they want educated employees.

As a matter of fact, Wal-Mart, Home Depot, Kroger, Wachovia, Rite Aid and a host of other businesses pay school property taxes, on both their buildings and inventories, to Fayette County. Their school taxes represent about 26 percent of the total, and autos account for another 8 percent.

Other big property owners and taxpayers who seem to fly under the radar are NCR Corporation, Inland Southeast Fayette, Matsushita, Hoshizaka America and the big utilities. As big businesses, they don’t get all emotional about paying their tax and their managers are undoubtedly reconciled to sharing our common burden.

If we were to reduce their property tax, these businesses would most likely charge the same prices they do today, since they generally advertise the same prices over wide areas, like the metropolitan Atlanta area. They are not particularly property-tax sensitive.

Reducing these businesses’ taxes is exactly what occurs with taxes targeted at property tax relief, like the Special Purpose Local Option Sales Tax, the famous SPLOST. Or even with a LOST, the Local Option Sales Tax, which Fayette County has.

The property tax burden lifted off their shoulders is transferred to those who pay sales tax, and it so happens that most businesses buy almost nothing on which they have to pay sales tax.

They buy no food. They buy no clothes. They buy almost no furniture. They buy no aspirins, toothpaste, diapers or what have you. Most of them buy no cars, or gas. They don’t buy school supplies for their kids (hey, they have no kids!). They don’t buy much of anything.

You’ve heard the argument from those who like the sales tax that “everybody pays it.” Well, that’s untrue. Businesses are subject to it, in theory, but in reality most end up paying very little of it.

In fact, the retailing businesses can make money out of the sales tax, because the state (under Code section 48-8-50(b)(2)) allows them to keep one-half of 1 percent of the tax they collect. No matter what the sales tax percentage is, the collection effort is the same, but the higher it is, the more the merchant keeps.

It’s no wonder, then, that the Chambers of Commerce proclaim their support for SPLOST whenever it might reduce their property tax. Their members gain from paying less property tax and from keeping a small portion of the extra sales tax, and they hardly pay any extra sales tax themselves.

What this tells us, in the face of claims that a SPLOST will reduce homeowners’ property taxes, is that SPLOST will also allow businesses to transfer their property tax reduction onto the backs of the taxpayers (and voters) who live and breathe and have no choice but to buy life necessities like food, clothing, furnishings and transportation.

Do the people who vote for SPLOST realize this? Perhaps not, as there is usually no one to tell them. But now you know.

Earlier, I provided you with a history of the sales tax in Fayette County. In coming weeks, I plan to go over the events of 2000 which helped bring us to today’s situation with the school finances and the school tax, and I’ll even offer suggestions on how we might handle the situation.

I also hope to explain what motivates some people to vote for SPLOST, and to go over some questions we might ask ourselves as we make our voting decision.

[Claude Y. Paquin, a Fayette County resident, is a retired actuary and lawyer who, among other accomplishments, received an undergraduate degree in education with distinction, along with a teaching certificate.]