Canton Mayor Gene Hobgood confirmed Tuesday that the city attorney was notified verbally by Georgia Attorney General Sam Olens’ office that the planned fire district was a tax, not a fee, and that means the tax district might not stand up to a challenge in court.
The informal opinion would mean that the proposed 1.25 millage rate to fund fire improvements could not be retroactive and that the senior exemption would still apply, the mayor said Tuesday.
Hobgood has scheduled a news conference for 10 a.m. today to discuss the findings and how the city plans to move forward.
The ordinance for the fire district was approved in August and allows the city to impose an ad valorem tax on property. If the rate was set at 1.25 mills, the city estimated it would generate about $930,000 on an annual basis.
The revenue would be collected in the same way the city collects property taxes. However, no exemptions would apply to the tax and the revenue collected would pay for enhancing fire protection.
“Having it declared a tax, if it is a tax, it cannot be collected this year since it was not in place Jan. 1 and we could not make it retroactive,” Hobgood said in an interview Tuesday. “The opinion also indicates that the senior exemption would have to apply.”
Hobgood has fought the proposal from the beginning, and exercised his veto power to delay the plan in July. At the time of his veto, he said he believed the fire district was a move by the majority of the city council to take away a senior property tax exemption for residents older than age 62.
“The only purpose that it served was to collect taxes in the absence of a senior exemption,” Hobgood said Tuesday of the proposed fire district.
The city had planned to conduct two public hearings on Thursday and move forward with the tax district in time for tax bills in October.
An email from the city clerk on Tuesday canceled the meetings, a move that caught Hobgood by surprise.
“It is my understanding that is the reason why the meetings were canceled,” Hobgood said of the attorney general’s opinion. “I did not cancel the meetings and I am not sure who did.”
Councilman John Beresford, who has been a part of the committee to address the needs for fire services in the city, said the opinion was from an assistant attorney general, but he still does not want to see a lawsuit against the city if it can be avoided.
“Our back is against the wall by the games that have been played, the vetoes, etc. We have another plan that I will bring forth at the work session on Thursday. We don’t want to do anything that will bring questions later,” Beresford said. “We don’t want a lawsuit. If that is the opinion, why should we proceed in that vein? We will come out with another plan.”
Councilman Bill Bryan, who is also in favor of the proposed fire district, called the attorney general’s opinion “murky.”
“The attorney general was not firm that it would not work,” Bryan said late Tuesday. “One option is that we could continue to pursue it and let someone sue us and we could see if it is legal.”
Bryan said that Hobgood and Councilman Glen Cummins, who has sided with the mayor on the issue, have continued to battle the proposal.
“Gene and Glenn insisted on stirring the pot and now this could end up costing our seniors more,” Bryan said.
Bryan said the city could explore other options.
“We can do a flat fee, a graduated fee or move ahead with district tax. We have to build these fire stations. If all the new development had not come we would not need these stations,” Bryan said.