Sales Tax On Monthly Spending
This table shows the additional amount of money residents would pay in a year if the sales tax is increased by 3 percentage points, based on the amount of money they spend in a month.
Amount spent each month • Taxes paid in 1 Year • 2 Years • 5 Years
$1,000 • $360 • $720 • $1,800
$1,500 • $540 • $1,080 • $2,700
$2,000 • $720 • $1,440 • $3,600
$2,500 • $900 • $1,800 • $4,500
$3,000 • $1,080 • $2,160 • $5,400
$3,500 • $1,260 • $2,460 • $6,300
$4,000 • $1,440 • $2,880 • $7,200
Source: Times Free Press calculations
DALTON, Ga. — Death and taxes may be certain, but the plethora of tax options Whitfield County residents face over the next year could come down to any number of unknown combinations.
If none of the options passes, the county would collect a 5 percent sales tax next year. If all of them pass, the sales tax will be 8 percent. The current tax is 6 percent, with 4 percent going to the state, 1 percent to Whitfield County and Dalton school systems and 1 percent split among the county and four towns.
Voters likely will be asked to vote on three 1 percent sales tax referendums. A 1 percent education tax will be on the ballot in November. County officials have indicated they likely will place a 1 percent special purpose tax on the same ballot, and a regional transportation tax is set for a vote in July 2012.
Each 1 percent tax brings in about $16 million to $17 million in revenue every year, or about $500 per county resident for all three taxes.
Next year, the city and county will renegotiate the split of the 1 percent local option sales tax. City officials say they deserve a greater split; the county disagrees. If the city wins any concessions, it will place even more pressure on a county government already struggling to meet its budget.
“The main issue is the complexity of the decisions that have to be made,” said Brian Anderson, president of the Greater Dalton Chamber of Commerce. “In general most people like the vehicle of the [special local option sales tax], but there is so much concern about the economy. It seems there is a lot of confusion among the voters — they will need to educate themselves [about] what this means.”
In the last few weeks, anti-tax and pro-tax advocates have squared off, and the battle is likely to become more heated in the days before the election. Dalton Mayor David Pennington vehemently opposes any tax increases, saying the economy is too fragile to support more taxes. Other city leaders and some residents support him.
The leaders of the two school systems and the county government say they need the money, and the sales tax is the least painful way to raise that money. Bringing in the same amount of money through property taxes would mean the county would have to more than double its millage rate, they say. The Whitfield County millage rate is one of the lowest in the state.
During a meeting to discuss the county sales tax, Pennington argued that adding taxes to the county’s fragile economy would be devastating. Since the beginning of the recession, Whitfield County has struggled with some of the highest unemployment numbers in the state. In June those numbers ticked up to 12.1 percent, compared with 11 percent the previous month.
“It is no time to put on an extra tax, it is time to reduce them,” Pennington said.
According to Pennington, lowering Whitfield County’s sales tax to 5 percent would attract businesses and shoppers to the area. Surrounding Georgia counties have a 7 percent sales tax and Hamilton County has a 9.5 percent sales tax.
Anderson said it is unclear how much effect a lower sales tax would have on the county.
“In a lot of cases, people shop where they want to, regardless of sales tax,” he said. “I do believe there are those out there who have to look at every single penny and, if they are paying more for their grocery bill, it may make a difference. It certainly sounds appealing to say we have a 5 percent sales tax.”
Anderson said he is concerned that one entity may call for a tax but the money has to be divided with other government agencies that may not need the tax. For example, Dalton school officials expanded Dalton High School with money from the education tax in effect, Anderson noted. However, more students are choosing to attend the alternative Morris Innovative High School, and school officials now say they need money to revamp that school.
Meanwhile, Dalton High School is not filled to capacity.
“Some of these things are not as well thought out as they could be,” Anderson said. “One group may need the money, but it turns into a slush fund for another. It is not being a good steward of very limited tax dollars.”
School officials and county leaders argue that the benefits to taxpayers are worth the small additional tax.
“I realize it is a regressive tax,” Whitfield County Chairman Mike Babb said. “But it is by far the easiest way to raise a large amount of money.”
Those supporting the tax also note that about 20 percent of the county’s sales tax dollars come from residents outside the county. Traffic on Interstate 75 and business from smaller neighboring counties means that county residents bear less of the tax burden.
TAXES VERSUS CUTS
Opponents of the taxes say the answer is cutting spending, not adding taxes. Several residents have said they plan organized opposition to the tax increases.
Pennington called on county and school leaders to cut their budgets next year, rather than expecting taxpayers to pick up the burden. He cited figures that show the city has cut spending by 17 percent since 2007, while the county has increased spending by nearly 12 percent.
“In a time that most businesses and families have had to reduce their spending, city government is the only of the four Whitfield taxing authorities [that has done so],” Pennington said.
Whitfield County Finance Director Ron Hale said those numbers, while accurate, do not give a true picture. From 2008 to 2010, the county cut its total budget 5.6 percent, with 13 percent in cuts coming from the spending controlled by the Board of Commissioners.
About 50 percent of the county’s budget is spent by constitutional offices such as the sheriff and the court systems, which also serve city residents. County leaders have little control over spending in those departments, which increased 7 percent from 2008 to 2010, according to budget numbers Hale provided. Other increases in spending came from employee health care costs.
Hale cited numbers showing the county spends $609 a year per resident in its general fund budget, while the city spends $804 per resident. The reason the city was able to make as many cuts as it did is because it spent more to begin with, he said.
“We have adjusted, but If you already have a minimal budget, you can’t make more cuts,” he said.
In the end, voters will have to decide if they want the certainty of added taxes and promised projects or the uncertainty of what officials may do if they do not have the money they say they need to run the governments.
“The good thing about a SPLOST is that it comes down to what the voters want to do,” Babb said.
Georgia has a 4 percent sales tax collected on everything but groceries. Counties can vote to impose three other sales taxes at the local level: the local option sales tax implemented in 1978, the special purpose local option sales tax passed in 1985 and the educational local option sales tax passed in 1997. The local taxes include groceries. In additional to sales tax, Georgians also pay income tax. The state average total tax rate is 9.1 percent, ranked 32nd in the nation. Tennessee taxes rank third lowest in the nation at a 7.6 percent average tax rate.
EDUCATION TAX (ESPLOST)
Both the Whitfield and Dalton school systems passed a resolution to place a five-year 1 percent sales tax on the ballot in November. A similar tax was passed five years ago and will expire in December. The tax would be used to pay off debt, including money Whitfield County borrowed to build Coahulla Creek High and Eastbrook Middle schools. Land, technology equipment and repairs to existing buildings also are listed. Dalton schools likely would use some of the money to add to elementary schools and to make changes to Morris Innovative High School.
COUNTY TAX (SPLOST)
Whitfield County leaders have not officially called for a 1 percent tax but will make a decision this month. A similar tax expired in December after being in place three years. The money would be used for a recreational complex, sheriff’s patrol cars, fire equipment and technology. Dalton and the other three small towns also would be eligible for some of the funding, but do not get a vote in calling for the tax.
The 10-year regional transportation tax will be voted on in July 2012 by 15 Northwest Georgia counties. It would bring in money to pay for the region’s transportation projects. Whitfield County has been promised about $100 million in project funding and about $3 million in discretionary funding.
LOCAL TAX (LOST)
The local option sales tax is not up for a vote but will be renegotiated next year to go into effect in 2013. Under the agreement negotiated in 2002, Dalton receives nearly 15 percent of the tax and the county gets 83 percent, with the remainder going to the small towns. City officials say they deserve more money based on their population. County officials say the money is used to lower property taxes for the entire county, including the city.
Mariann Martin covers healthcare in Chattanooga and the surrounding region. She joined the Times Free Press in February 2011, after covering crime and courts for the Jackson (Tenn.) Sun for two years. Mariann was born in Indiana, but grew up in Pennsylvania, Tennessee and Belize. She graduated from Union University in 2005 with degrees in English and history and has master’s degrees in international relations and history from the University of Toronto. While attending Union, ...