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Anti-SPLOST tax impact calculations are wildly off the mark or exaggeratedTue, 10/21/2008 - 3:26pm
By: Letters to the ...
Recently it was stated by one of the anti-SPLOST columnists that the E-SPLOST would require a contribution of nearly $700 per household per year over the next five years to meet the maximum collection of $115 million. Fortunately for the residents of Fayette County, that claim is wildly untrue. For each household in Fayette County to contribute $700 a year they would need to have spent $70,000 each. According to the U.S. Census Bureau, in 2007, the median income for a household in Fayette County was approximately $77,000. For the entire household income to be subject to the E-SPLOST it would need to be an income tax and not a sales tax. The median income of $77,000 above is the “gross pay” before taxes, 401k, medical benefits and such. If we want to calculate the effect of the E-SPLOST on a typical Fayette County family, we must also exclude, mortgage/rent payment, utility (gas/ water/ electric) payments, most internet purchases, and any other payment not currently subject to sales tax. Fayette County residents will pay E-SPLOST for Fayette County schools, only on purchases made within Fayette County. It is important to know that the E-SPLOST is a 1 percent sales tax that only applies to taxable purchases in or deemed in Fayette County. My family lives in Peachtree City and both my wife and I also work in Peachtree City. Therefore, nearly all of our purchases subject to sales tax will be subject to the Fayette County E-SPLOST if passed. In a normal month we spend approximately $2,000 a month, between groceries, dining out, clothes, incidentals and other items. Our monthly average E-SPLOST would be approximately $20, which is a lot of money for anyone especially in these times. Next we need to consider the property tax relief the Sullivan family will receive. Based on my 2008 property tax bill, the fair market value (FMV) of our home is $277,090 and thus the assessed value is $110,836 (277,090 x 40 percent). In the second year of the E-SPLOST, the millage for the school bonds should be reduced by about 1.45 mills. Thus, we will receive $160 in property tax relief for the year or approximately $13 a month. Therefore, the net cost for my family to ensure that our schools have the resources necessary to continue the great results that we expect is approximately $7 a month. I noticed that the FMV of my home dropped slightly on my tax bills from 2007 to 2008. If the entire digest dropped by a similar .8 percent, the schools would lose nearly a million dollars in funding. But a better question to me is how much would the FMV of our home drop if we did not have one of the best school systems in the state? Alternatively, how much of our home value is determined by having the BEST schools? I guess we could ask ourselves and our neighbors how many of us moved to Fayette County to benefit from the schools. Although there are many assumptions and factors to consider when evaluating and predicting home value, I used a simple assumption in my analysis. I assigned a 1 percent factor to approximate the benefit of our schools over the five-year E-SPLOST period. Whether my home goes up 1 percent over that time or has less of a decrease due to the current conditions, I figure that having the “Fayette Advantage” is worth 1 percent of what I paid for my home and what it is worth now. Therefore, based on the current FMV of my home, I will receive approximately $2,700 in value or $45 a month during the E-SPLOST period for my approximately $7 a month investment, even if I did not have a child in the schools. This analysis helped me decide that the Fayette County schools were worth investing in to ensure we retain the high quality schools we have come to expect. Having excellent public schools benefits the entire community and is worth our investment. Neil Sullivan Co-Chair Fayette Citizens for Children Peachtree City, Ga. Neilsullivan72@gmail.com login to post comments |