Atlanta residents will decide in March whether to renew a longstanding penny sales tax city officials say has been used to fix the city’s water and sewer issues while keeping utility rates low.
If the tax is approved, taxpayers would pay up to $750 million over four years to continue fixing the city’s water issues which are projected to cost nearly $4 billion.
City Council approved the March 24, 2020, referendum during its Nov. 18 meeting. The current penny tax would end Sept. 30, 2020.
The Municipal Optional Sales Tax, or MOST, has been in place since 2004, when former Mayor Shirley Franklin was in office, and has helped Atlanta pay for sewer improvements required by a federal consent decree, according to The Atlanta Journal-Constitution archives. Issued in 1999, the consent decree also required Atlanta to eliminate sewage overflows into rivers and streams.
If the tax is not renewed, the city risks violating the federal consent order, forcing them to pay fines and delay any work to further improve the city's water system, Atlanta Department of Watershed Management officials said during a presentation last month. The city could also be forced to raise water and sewer rates by 25 percent — an increase that's been staved off by the penny tax, officials said. Taxpayers have not seen an increase in water rates since 2012.
Councilwoman Carla Smith recalled the city’s troubles prior to the decree and said if the city hadn’t acted on it the federal government would’ve intervened.
“The good thing with this is we’re doing it ourselves,” Smith said.
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“If this tax is not renewed, then the whole burden of finishing the sewer work for the rest of the consent decree will fall to ratepayers,” Smith said. “And we don’t want to raise rates again. This is also a way tourists and people that don’t live in Atlanta can contribute to paying for using the bathroom when they come to town.”
Last year, the city collected $145.2 million from the penny tax. The city is expected to spend an additional $1.4 billion by 2027, when to complete water-related projects that would clean and maintain Atlanta’s storm sewers to avoid flooding.
Since its inception, the penny tax has raised about $2 billion for its updated sewer system, city officials said.
Atlanta was notorious for having high rates and once paid 108% more than New Yorkers in rates, the AJC previously reported.
With the tax, the city has also repaired and replaced 375 miles of old sewer lines and increased sewer capacity, officials said. Sewer spills have also been reduced by 97 percent between 2004 and 2018.
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BY THE NUMBERS
$145 million: How much the sales tax raised last year.
$750 million: How much the sales tax is projected to raise in the next four years, if renewed.
$2 billion: The amount raised since 2004 for Atlanta’s upgraded water/sewer system.
$4 billion: Projected total cost to fix Atlanta’s water/sewer system.
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