Supreme Court nixes Beltline funding
February 11, 2008 at 9:24 am by Thomas Wheatley in NewsThe Supreme Court of Georgia has unanimously ruled that the use of school-tax revenue for non-educational purposes — in this case, to build the Beltline — violates the state constitution. John Woodham, a Fulton County resident opposed to the tax allocation district funding mechanism, represented himself in the case.
What does this mean? Well, it means the Beltline project is now without a whole lotta’ money. About $200 million. Trying to get the exact amount here…getting ranges from $200 million to $1.7 billion.
From the court’s press release:
But in today’s unanimous ruling, written by Justice Hugh Thompson, the Court agrees with Woodham that the use of school funds for non-educational purposes violates the Educational Purpose Clause of the state Constitution. The Court cites two earlier Supreme Court decisions in concluding “that school tax funds levied and collected by the school system cannot constitutionally be applied to benefit the BeltLine project.â€
Full press release after the jump. More to come on this later.
WOODHAM V. CITY OF ATLANTA ET AL. (S07A1309 and S07A1566)
The Supreme Court of Georgia has sided with a Fulton County resident in ruling that the Georgia Constitution prohibits the use of school-tax revenue to help fund the proposed BeltLine project. The City had sought approval for the sale of bonds to support the project. John Woodham intervened, claiming that the use of school taxes as security for the bonds was unconstitutional. The trial court validated the bonds and overruled his objections.
Fulton County and the City of Atlanta want to transform old railroad lines surrounding the city’s urban core into a mixed use development known as the BeltLine Redevelopment Plan. The project would use 22 miles of railroad segments to link together parks, trails, transit and new development. The City created a specific area, called a Tax Allocation District, and authorized the use of educational ad valorem property taxes collected from the area to help pay for the project. The school system agreed to participate.
But in today’s unanimous ruling, written by Justice Hugh Thompson, the Court agrees with Woodham that the use of school funds for non-educational purposes violates the Educational Purpose Clause of the state Constitution. The Court cites two earlier Supreme Court decisions in concluding “that school tax funds levied and collected by the school system cannot constitutionally be applied to benefit the BeltLine project.â€
In a 1994 decision, the Supreme Court ruled that the use of school tax revenue to finance road improvements in DeKalb County “would stray too far from the [school] District’s principal task of educating young people in favor of providing a benefit to all citizens that the County generally has the duty to provide.†If the Court found that expenditure impermissible, today’s decision says, “it follows that school taxes cannot be used to fund the BeltLine Plan which provides a benefit to all citizens, and which has little, if any, nexus to the actual operation of public schools in the city of Atlanta.â€
Attorney for Appellant (Woodham): John Woodham, Pro Se
Attorneys for Appellees (City): Matthew Calvert, Douglass Selby, Benjamin Johnson, IV (for the City); Charles Johnson, III, Sarah Leopold, Joshua Bosin (for the school system), Samuel Woodhouse, Cozen O’Connor, Overtis Brantley, Larry Ramsey, Jr., Robert Martin (for the county), Thurbert Baker, Attorney General, R.O. Lehrer, Dep. A.G., Michele Young, Asst. A.G., Frances Mulderig, Asst. A.G. (for the state)
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February 11th, 2008 at 10:42 am
Mr. John Woodham and the GA Supreme Court-
Thanks for nothing. We needed this project really, really badly in my neighborhood, where the City has let the general area get so massively run down that developers cannot feasibly build and do projects here without massive subsidies. Your lawsuit and the resulting judgement will now keep many of the horridly impoverished areas as run-down and destitute as they have always been. Of course, GA has always been very good at keeping the poor minority “element” segregated and isolated away into what amounts to de facto ghettos. I guess I should not have expected any different in this decision. We on the South and West sides of Atlanta need help to clean our parts of the city up. This is now one less avenue available for us to get that help.
February 11th, 2008 at 11:24 am
I would like Mr. Woodham to explain how paralyzing all TAD redevelopment projects across the city can possibly end up benefitting our school system and students. Does he even really care about schools?
Thanks a lot you rich, bored Buckhead lawyer. Your ego just cost us the future of this city.
February 11th, 2008 at 12:05 pm
TAD funding is not paralyzed unless the government tries to use school taxes and assets to pay for them. TAD’s are still available and usefule, but they must be secured with funds other than school funds. That makes sense to me.
The TAD funding the Beltline could actually devastate school funding.
Imagine the Beltline is as big of a success at The Underground (I think it will be fantastic, but work with me) and the funds guaranteeing it are the bonds issued on the backs of the schools. That could devastate the ability to raise funds for the schools through bond issues because those funds would already be tied up in the Beltline.
The good credit and financial security of schools should be reserved for schools.
Nice class warfare shot at the attorney. Could it be that the plaintiffs don’t want the taxes paid for their childrens schools to be siphoned off for the beltline?
February 11th, 2008 at 12:57 pm
This is a classic case of shooting the messenger or blaming the victim. It looks like Mr. Buckhead was not a crazy malcontent after all.
There is a reason this dingbat funding scheme was never tried before in Georgia — EVERY GOVERNMENT, EXCEPT THE ATL, knows this violates the state constitution. Does the City of Atlanta have a competent attorney?
February 11th, 2008 at 1:17 pm
Dale - are you kidding? I seriously wonder if Mr. Woodham or anyone else who claims to be so concerned about the Atl Public School System sent their kids to ANY public schools. In addition, Mr. Woodham lives in a nice, cushy area of town where they have sidewalks and curbs and crosswalks, parks, and constant police support, as well as streetlights that are properly maintained and all of those other nice things that living in a city should come with. In my neighborhood, the TAD is supposed to help put much of that into place. Some of us are equally concerned with our kids having a safe route to get to and from school as we are about the quality of that school. Some of us are equally concerned with them having a place to play where they will be safe from traffic and gang and drug activity. THAT is what the Beltline and TAD funding is supposed to mean for my area.
We’re constantly ignored by the City and its officials while they positively dote on Buckhead and the wealthy areas of town. If the TAD had been allowed, did you ever stop to think of the increase in property values (both residential AND commercial) HELPING the public school systems in those areas?
You have ONE man who is probably well intentioned in his mind spending time and effort to (probably unintentionally) keep the ‘hood right where it’s at. ONE MAN stopping this whole thing while the majority of the City is working as hard as it can to make it happen. ONE MAN for whom it will not make a lick of difference because he already has his wonderful home and his wonderfully educated kids, living close to stores (because they’re not afraid to set up shop in HIS neighborhood), with well-lit streets and no risk of flooding when the heavy rains come.
And he has basically just flipped the rest of us the ultimate bird and gone on his way. Yeah, way to go Mr. Woodham - head on out to Disneyland and celebrate. The rest of us are going to have to figure out where to get the money to clean up our neighborhoods and get developers to not scrap all of the wonderful projects that made our property values go up last year just on their approval. You’re a real estate attorney - maybe you can help the people who bought homes in my area because they thought it was improving figure out what to do when the bottom drops out as these projects get cancelled.
February 11th, 2008 at 3:59 pm
For the record, Mr. Overlord, TADs have been created and bonds issued in Marietta, East Point, Acworth and many other of your vaunted suburbs across the state. Given the many factual ways to attack the competence of the City of Atlanta, why bother lying?
February 11th, 2008 at 4:29 pm
T stands corrected…the “many other” clause in the post above ain’t true. Only Marietta, Acworth and East Point. T regrets the error.
February 11th, 2008 at 4:32 pm
If you learned that the city were using school money for Sembler to build a mixed use development in a blighted part of Atlanta, would you agree with that? If a citizen stepped forward to stop it, would that be a good thing? Would you oppse that citizen? If that citizen were successfull, would they have just “flipped a finger” to the residents of the blighted area? Would it matter if they lived there or not?
Woodham may not have children in public schools, so what? My poorly worded point was that, as a BIG TIME taxpayer (goes along with your class warfare shot at him being rich) he is within his rights to be certain that the taxes paid for schools go to the schools, rather than be siphoned off for other projects, no matter how worthy those projects may be. As a citizen, he has every right to hold his government accountable for their actions.
Funny how some of the “fight the power” readers of CL squeal when it is THEIR ox being gored by a citizen watchdog.
I support the Beltline in every way and I live in a neighborhood which will benefit greatly from it. I think the TAD was an idiotic and illegal method of funding it. I was at least half right.
Gambling for profit on development by buying a house there is a dangerous move. If a person gambled a childs safety by doing that, they should be ashamed. However, I understand that some simply cannot move and have to deal with the issues you point out. Violating the funding laws is the answer?
I understand the increased the value will help the schools a little (very little overall), but the possible outcome I laid out would devastate them. The increased expense, or complete inability, to raise money through bond issues woudl cripple the schools for years.
Obeying the law is a bitch and the people who run the city government should give it a try.
February 11th, 2008 at 4:35 pm
My Dearest Mr T. - the existence of TAD’s is not what is illegal, it is the misuse of TAD funds designated for education that is the problem.
Love and Kisses,
Dale
February 11th, 2008 at 5:16 pm
I never suggested anything of the sort Dale, my love. I was simply correcting Mr. Overlord, who said “EVERY GOVERNMENT, EXCEPT THE ATL, knows this violates the state constitution.” Clearly that’s not the case since so many cities and counties have either issued TAD bonds or are preparing to.
In any case, I said to a friend this morning when the news broke that, while I may be very disappointed in the ruling’s effect on TAD-related projects, it’s hard to argue with the Court’s finding.
February 11th, 2008 at 5:49 pm
I think Overlord was not as detailed as needed for these threads where we shread each others statements on miniscule points of order and the meanings of terms, but I understood him to mean that the other governments know the misuse of the TAD to be illegal, not the TAD itself. TAD’s are not “dingbat funding schemes”, but using a school bond issue to fund development of the beltline is that exactly.
I am disappointed that the funding didn’t go forward, but I was ignorant of the source of funds. I would oppose the funding scheme, but not the Beltway.
I guess I am saying that I support the war, but not the soldiers.
BTW, my college roomates name was “Tad” and I supported him. Sometimes.
February 12th, 2008 at 5:08 pm
Overlord and Dale are completely wrong about this being some sort of unique, new funding scheme. Other TADs in Georgia and in other states have used school tax funds as a significant source of funding. The Supreme Court’s ruling doesn’t effect the TADs that already exist and used school tax funds. It just means that the Beltline and future TADs cannot use school tax funds until they amend the Georgia Constitution to broaden the meaning of “for school purposes only.”
February 12th, 2008 at 7:11 pm
I don’t recall saying that government misuse of tax funds was new or unique, because it clearly is neither.
Only the government could look at the phrase “for school purposes only” and think it’s okay to use that money for commercial and residential real estate development.
February 13th, 2008 at 6:32 pm
Overload and Dale, do your research before you post ignorant statements. I guess you don’t realize that TADs are used in 48 of our 50 states to redevelop blighted areas (most states call them tax increment funds or TIFs). So does that mean they are illegal in all the other states?
ALSO, when a TAD/TIF redevelopment project area is created, the value of the property in the area is established as the “base†amount. The property taxes paid on this base amount continue to go to the various taxing bodies as they always had.
IN OTHER WORDS, the funds to support the redevelopment DO NOT come from current revenues, but from future tax revenues, not otherwise expected to occur.
Get your facts straight before you post your opinions to the www for all to see.
February 13th, 2008 at 7:12 pm
Dear UnEducated Dipshit Who Can’t Read and Comprehend,
I should improve my research so that I don’t do stupid things like respond to “Overload”, rather than “Overlord”?
I have said OVER AND OVER AND OVER, TAD’s are not illegal, but the use of the SCHOOL funds was inappropriate.
A few quotes from my posts that you obviously did nto research,
“My Dearest Mr T. - the existence of TAD’s is not what is illegal, it is the misuse of TAD funds designated for education that is the problem.”
“other governments know the misuse of the TAD to be illegal, not the TAD itself. TAD’s are not “dingbat funding schemesâ€,
“TAD’s are still available and usefull”
So where did I say a TAD was illegal? I simply said the government should not have used funds directed to be used for educational purposes (as pointed out by another poster) to develop retail and commercial property.
Do YOUR research and comment intelligently on my post.
Moron.
February 14th, 2008 at 12:33 am
TADS/TIFS reward the owners of blighted property by bailing them out of their expended assets at taxpayer expense. The owners of property in blighted areas could and would invest in gentrification themselves if it made good business sense. But since it does not, the politicians step in, buy out the owners at premium prices with taxpayer money — and in the process, garner support for their re-election campaigns — and then proceed to garner more support for said campaigns by distributing the taxpayer-funded wealth to building contractors. The end result is that hard-earned taxpayer dollars are wasted on projects that would never be built if the decision was solely the result of free market forces.
February 21st, 2008 at 8:11 am
Enlighten me here … Woodham is from Buckhead?
I was told he was an Alpharetta resident. So, perhaps in error, I’d assumed this was a typical
installment of the “don’t tax my white A__ for the poor folks” saga. Not that Buckhead’s elite aren’t just as capable of the DTMWAFTPF maneuver … it’s just that they tend to be a tad more onboard with the notion of improving the metro Atlanta area as a whole.
I’m not saying there aren’t valid reasons for questioning use of TAD funds for development. Just curious as to who Woodham is and his motivations.
“Concerned citizen protecting our school funding” doesn’t quite ring true.
February 21st, 2008 at 10:06 am
Pat,
Woodham’s a real estate lawyer who lives in Buckhead. He previously fought a development along Lindbergh as well. He’s been reluctant to speak with the media and has, to this point ,let his actions speak to his motivations. But from what I can tell, he believes in following the state Constitution as it is written. He’s hinted that he’s not opposed to the Beltline, even saying in a release to the media that he’s looking forward to a successful project.
April 24th, 2008 at 10:59 pm
A better funding scheme was found for the Atlanta-Marietta commuter rail. The state can divert money from the leasing of the Western and Atlantic rail lines to CSX in future years, and get the funding upfront now.
April 24th, 2008 at 11:00 pm
Forgot the article… doh!
http://www.onlineathens.com/stories/041408/opinion_2008041400149.shtml