APN Overview of Proposed 2010 Georgia Amendment 5, Referendum A


(APN) ATLANTA — There are five proposed amendments to the Constitution of the State of Georgia on the ballot in about one week, as well as a statewide referendum.

Atlanta Progressive News spoke with several state lawmakers and local advocates to learn about the pros and cons of each one. In two previous articles, APN considered proposed Amendments 1, 2, 3, and 4. This article will consider proposed Amendment 5 and Referendum A.


The ballot question is: “Shall the Constitution of Georgia be amended so as to allow the owners of real property located in industrial areas to remove the property from the industrial area?”

H Res. 136 is the resolution which proposed the amendment.

Any owners of real property located in industrial areas, if they choose to remove themselves from the industrial area, will automatically become irrevocably annexed to the City which already provides water service for the area (or if no city provides water service, the city which provides fire service).

While only two industrial areas, in Chatham County and Jeff Davis County, will be impacted, it is still amending the Constitution of Georgia. It changes the language stating that an industrial area “may” be annexed to a city, to “shall” be annexed, should they choose to remove themselves from the industrial area.

Interesting background of this obscure Amendment is provided by the Secretary of State’s office: “Under the current Georgia Constitution which took effect in 1983, new local constitutional amendments were prohibited, but certain prior local constitutional amendments, including those creating industrial areas, were continued in effect. Any modification in such industrial areas must now be carried out through state-wide constitutional amendment.”

“The current proposal would modify the conditions under which an owner of property in an industrial area may choose to remove the property from the industrial area. By a general constitutional amendment ratified in 1996 a property owner was authorized to remove the property, but only if the property was located on an island. The current proposed amendment would remove the island limitation, so that any owner of property in an industrial area could choose to remove the property from the industrial area. Further, upon the filing of a removal certificate, the property shall be irrevocably annexed into the city which provides water services, or if none, then into the city that provides fire services.”

“In 1950, [local] voters approved an amendment to the Georgia Constitution that created certain industrial areas within unincorporated Chatham County for the purpose of economic development. Three additional parcels were added as industrial areas by an amendment in 1956. These amendments specified that the areas would not be subject to municipal taxation except for a 5-mill levy for furnishing water and fire protection services,” Mayor Otis Johnson of Savannah wrote in a commentary in support of Amendment 5 published in the Savannah Morning News newspaper.

“Recently, some property owners in these industrial areas have expressed a desire to remove their properties from the industrial area and become part of a city that can provide them with a full range of municipal services and alternative land use and zoning classifications,” Johnson said.

“These property owners would also have the option of not changing a thing, and keeping their property in an industrial area exactly as it has remained for the past 60 years,” Johnson said.

State Sens. Nan Orrock and Curt Thompson, and Rep. Stacey Abrams, said they were supporting Amendment 5.

But the Libertarian Party of Georgia (LPG) opposes Amendment 5 “due to the irrevocable annexation clause, should a property owner choose removal from an industrial area.”

Brett Bittner, Operations Director for LPG, told APN the owner of the property in the industrial area should have the choice of whether to annex to a city, or whether to remain a part of the unincorporated part of the county but not be part of the industrial area. “It would take away their choice… and for future owners of the property.”

Former State Sen. Regina Thomas, who represented Savannah, said she thought there were too many unanswered questions about the legislation and she would be voting no.

In all, no one has explained why it is necessary to change the law’s existing language from “may” be annexed to “shall be annexed.” As asked by LPG, why not have the option of leaving the industrial zone while remaining in an unincorporated part of the county, if indeed, as Mayor Johnson says, the objective is to provide more property owners with choice and flexibility?

State Rep. Bob Bryant (D-Garden City), who sponsored the legislation, told APN he could not immediately answer the question, although he said that for the most part the industrial area properties in Chatham County had been already serviced by Garden City, paying for water and fire service.

Sen. Thompson suggested it was only fair that the property would be annexed to the City, because the City has already made the investments in infrastructure which have benefited the property.

Bryant explained that the industrial area property owners of Chatham County, and the City of Garden City, requested he introduce the legislation, and that shortly thereafter, the City of Savannah decided they wanted a piece of the action and that the two cities negotiated on the final language of the bill.


The ballot question, for the single statewide referendum this year, is: “Shall the Act be approved which grants an exemption from state ad valorem taxation for inventory of a business?”

HB 482 is the resolution which proposed the referendum.

Essig told APN the total cost of the exemption would be “about 2 million dollars, a small amount of cost to state funds. We might be the only state that still has it [the ad valorem tax for inventory of a business]. Theoretically the idea is to encourage large warehouse entities locate here.”

“We’ve [at GBPI] talked about not giving tax breaks when you can’t afford it. We have talked about being strategic and careful of doing tax breaks. This could have a positive impact as we try to recruit large warehouse operations,” Essig said.

“Two million dollars isn’t a lot out of a 7 billion dollar budget, but it could pay for a lot of teachers,” Essig said.

State Sens. Orrock and Thompson, and Rep. Abrams are each supporting the measure. State Sen. Vincent Fort is not.

Sen. Thompson said he was supporting the measure although he dislikes the trend towards special-interest tax breaks. “Two million dollars is not a lot of money. The question is, will it be worth it in terms of the jobs created, will we get the money back?”

Sen. Orrock said that currently only some counties charge the tax. “It varies from county to county, you’ve got a jigsaw puzzle, and then people are told to relocate out of Fulton County to avoid the tax. The other theory is, when you have to pay a tax on inventory, it encourages start-and-stop rather than a flow from the manufacturer.”

Rep. Stacey Abrams wrote, “I voted in favor of the legislation and will vote yes at the ballot. While the repeal of the inventory tax will have limited effects on encouraging new business (i.e., the argument that the tax stops business from coming to Georgia is a fallacy – education gains and transportation are key issues, not arcane taxes), the tax is not widely imposed, its economic impact varies and, overall, an inventory tax is a piecemeal approach to a necessary larger overhaul of the state tax code.”

Sen. Fort, meanwhile, said there were too many special interest tax breaks, and he was not in support of another one being enshrined in the State Constitution based on a theory, but not evidence, of job creation.


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