I am pleased to report a significant victory for DeKalb County taxpayers that occurred late in the 2007 legislative session.
Thanks to House Bill 181, which I authored, and due to the efforts of a small handful of DeKalb legislators who helped pass this legislation, you now will have the opportunity to vote in a referendum anytime the DeKalb County Government proposes to use your tax dollars to repay the principal and interest on new bonds for county projects.
You may be asking: Don’t we already have the right to vote on bonds? After all, there was a referendum to approve the $230 million bond issue that was proposed by the county back in 2005 for parks, libraries, and transportation projects.
Without House Bill 181, the answer to that question is no. Only general obligation bonds, the kind of bonds that show up on your property tax bill, require a referendum. As an end-run around your right to vote in a general obligation bond referendum, the county has made a practice of asking the legislature to create new county government entities known as authorities, and to give these authorities unlimited power to float additional revenue bonds, a different type of debt.
By now, you probably have more questions:
What is an authority? An authority is a specialized quasi-governmental entity created by state law for a specific purpose. Frequently, an authority builds and oversees one or more specific capital projects, like a water and sewer authority, a housing authority, or a hospital authority. In DeKalb County, an authority usually has a governing board appointed by the CEO.
What are revenue bonds? When used for their intended purpose, revenue bonds are debt on which the principal and interest are repaid using revenue generated by the project that was built using the bonds. For example, water and sewer fees are used to repay the revenue bonds for water and sewer projects, and rents are used to repay the revenue bonds for housing projects.
However, the authorities that DeKalb County asks the legislature to create are different. These authorities issue revenue bonds, build projects for the county, and lease the projects back to the county for the county’s use. The county then pays the principal and interest on the bonds directly out of the county treasury in the form of rent payments.
In other words, non-elected appointees of the CEO are authorized to float bonds for which your tax dollars are used to repay the principal and interest. The CEO’s paid lobbyist stood up in a recent DeKalb County House Delegation meeting and declared that the county may seek to fund hundreds of millions of dollars in public safety projects using this mechanism. Scary.
The few voices of fiscal responsibility among DeKalb legislators don’t control enough votes within the DeKalb delegation to stop local legislation that would create these county government authorities, but we were able to pass statewide legislation to require a referendum so the county must seek your approval whenever it proposes to use these authorities to float bonds, incur debt, and spend your tax dollars. That’s exactly what House Bill 181 does.
Many thanks to Senator Dan Weber, who carried HB 181 in the State Senate, for his outstanding work in securing Senate passage of the bill. Representatives Jill Chambers and Fran Millar, two co-sponsors of HB 181, deserve thanks for their assistance during a contentious floor debate in the House of Representatives on final passage of the bill. Representatives Kevin Levitas and Mary Margaret Oliver also co-sponsored and voted in favor of giving you the right to vote on bonded debt. The other 14 members of the DeKalb County House Delegation voted against the measure. Governor Perdue signed HB 181 into law on May 24.