2-mill tax to stay despite citizen concerns
By Monroe Roark
The 2-mill tax levied to support the Henry County Water Authority cannot be taken away until more than $200 million in debt is erased.
That was the opinion given to the Board of Commissioners at its June 6 regular meeting by an attorney who has been closely involved in the HCWA’s various bond issues over the past several years.
County attorney Patrick Jaugstetter began a presentation on the matter by informing the board that the water authority’s current indebtedness is about $203 million, with annual debt service totaling about $22 million. The last of the loans relating to those obligations is to be paid off in 2030, he said.
Jim Henderson, who according to Jaugstetter, has served as bond counsel for most if not all of the HCWA bond issues now outstanding, then stepped up and gave a more detailed rundown of what can and cannot be done regarding the tax, which several citizens have repeatedly spoken out against and urged commissioners to call for a referendum to remove it.
A 1968 constitutional amendment approved by voters created the 2-mill tax to build out and support the water and sewer system, Henderson said, and it was later continued to the present. The last HCWA bond issue was in 2011.
The resolution in effect is “a contract with the bond holders” that obligates the county to levy the tax throughout the life of the bonds, according to Henderson. Revenue bond law in Georgia provides that it is a contract that can be enforced, and the county would be in default not to levy the tax, he added. “Case law is replete that you can’t impair a contract,” he said.
Henderson acknowledged that there is a provision in the Georgia constitution allowing for the repeal of a constitutional amendment by referendum. But in this case the existing bond holder covenant would have to be protected.
“The law is quite clear,” he said. “It would violate the Georgia and U.S. constitutions on impairment of contract.”
Henderson said the states of New York and New Jersey sought within the past 20 years to repeal provisions requiring them to designating specific tax money for the support of their port authorities. The U.S. Supreme Court ruled that the states could repeal, but the contract on repayment of the bonds remains in force until the bonds are paid off.
“There is no way, short of retiring the bonds, to get out from under the 2-mill tax levy,” said Henderson. “The law is quite clear on this. It is not a matter of much interpretation.”
The total annual revenue from the 2-mill tax will soon approach $14 million, still far short of the amount paid every year for debt service.
Jaugstetter said HCWA officials have capital improvement plans in place for the next few decades that call for nearly $1 billion in improvements such as expansions of sewer lines and water treatment plants.