The Answer to Gwinnett’s Money Problems: A Tax Increase
The Atlanta Journal-Constitution asked me for my opinion on Gwinnett’s money problems and, of course, I was more than willing to oblige. The full article is published here, but the most controversial of my recommendations will be a “tax increase”… that part of the article is excerpted below. For more on my “tax increase,” spend some time here.
For the past several years, the commission has failed to fully fund its budget by adopting an insufficient tax rate. It has done so for no financial reason, but to avoid the political consequences of “raising taxes.” In my opinion, that is just as irresponsible as if the commission took more of your tax dollars than it actually needed.
A deficient tax rate has a hidden “cost.” Because the deficit must be covered by cash reserves, the interest on those reserves — cherished non-tax revenue — is lost for future years. That loss of revenue must then be replaced somehow.
In a “slow-growth” period, the downward spiral of diminishing nontax revenue continues to the point that only a massive tax increase can stop the hemorrhaging.
Is raising the millage to a mathematically correct level a “tax increase”? Not if the commission can justify every expense and has maximized the generation of nontax revenue — in that case, the tax rate represents the true cost of our county government in relation to the value of all taxable property within the county.
