The Troup County Commission and city councils of LaGrange and Hogansville are in favor of tax allocation districts to spur economic development in areas that might otherwise be shunned by developers.

The move would require local legislation in the General Assembly and voter approval in a November referendum.

West Point approved a tax allocation district, or TAD, in a November referendum. Under the financing vehicle, the government continues to receive property tax revenue from the district, but increases generated by new investment would be used to retire a 25- to 30-year bond issue that pays for infrastructure and other capital costs up front. Once the bonds are retired, the government gets the full tax revenue.

Wolfe cited the example of a 586-acre tract along Interstate 85 for which the county receives $19,000 per year in tax revenue.

“We’d still get that, but new property taxes above that would fund the bond offering to put in infrastructure,” such as water and sewer lines. “… I cannot find a downside to it,” Wolfe said at Saturday’s meeting with representatives of all three city councils, the school system, West Georgia Technical College and the LaGrange-Troup County Chamber of Commerce.

Homeowners affected by the increased tax values would be protected by measures such as freezing appraisals for the duration of the bond offering or until their homes were sold.

Developers often can’t get bank loans for the high cost of infrastructure and therefore projects never get off the ground, Wolfe said, adding, “We’ve had a series of developments that are struggling or are in different stages of default.”

Georgia currently has 30 TAD projects and they all seem to be doing well, Wolfe said.

After voter approval, public hearings would be required on a proposed project or redevelopment plan, and then the affected taxing authorities would have to sign off on it. A project in the cities, for example, also would have to be endorsed by the County Commission and school board. A project in the unincorporated area would have to get the school board’s approval.

The local governments would have no obligation for debt service on the bonds, Wolfe said.

“There’s no recourse to the taxpayers,” he said. “That’s a key, key point and a point that’s sometimes misunderstood.”

TADs, which cannot exceed 10 percent of the tax digest, also create jobs, “which we desperately need, he said.

“We’re using the TAD to redevelop an area of the city that otherwise wouldn’t be redeveloped,” West Point Mayor Drew Ferguson IV said.

He said the city will focus on the Ga. 18 corridor, which has a housing project on one side and a once-proud neighborhood on the other side.

“This is a tool to go into a neighborhood with a master plan and reinvigorate it,” Ferguson said. “Otherwise it won’t happen because it’s not cost-effective.”

Six TAD referendums were on the ballot in Georgia last year, and West Point’s was the only one that passed - with 81 percent of the vote - “because we’re looking at a way to improve the human condition,” Ferguson said.

“You’ve got to almost go door to door” to campaign for the referendum, he said. “It’s not just something you put on the ballot and have a couple of articles in the newspaper and hope for the best.”

Ferguson said he agreed with Wolfe that there’s no downside to TAD financing.

“It’s not driven by benefit to the developer, but to improve the human condition,” he said.

It also ties into many of the goals of a recently completed Georgia Tech study on making Troup County a more livable community, he said, adding, “It’s about quality of life, and elimination of slums and blight.”

“This will ensure that our growth moves forward in a very positive way,” he said, and it will help diversify the job base beyond the auto industry.

“When you change the environment, you change the outlook,” he said. “That’s been proven over and over again.”

Also on Saturday, La-Grange City Council ap-proved increasing the 5 percent hotel/motel tax to 8 percent as authorized by a change in state law a couple of years ago. Troup County and the other two cities are expected to follow suit.

Of that 8 percent, 3 percent will continue to go to the respective governments and 2 percent to promote tourism. Of the additional 3 percent, at least half must be used for existing tourism efforts and the other half could go for loosely defined “tourism product development.”

Hotels and motels in LaGrange generate the lion’s share of tax revenue - $457,000 in fiscal 2008, of which 40 percent goes for tourism development. The unincorporated area generated $128,000 and the other two cites much smaller amounts.

The Chamber of Commerce promotes tourism for LaGrange and Troup County, and downtown development authorities do it for Hogansville and West Point.

Joel Martin can be reached at jmartin@ lagrangenews.com or (706) 884-7311, Ext. 235.