ATLANTA (CN) – Atlanta illegally spent $54 million in tax money intended for schools on redevelopment projects, two property owners claim in a class action. They say the city should refund that money to taxpayers.
Property owners John Sherman and Christopher Eichler filed the class action in Fulton County Superior Court against the City of Atlanta, its Development Authority, the Atlanta Independent School System, Atlanta Beltline Inc. (which manages a tax assessment district), and the Fulton County Tax Commissioner.
They seek refunds for all Atlantans who have paid taxes on their property since Jan. 1, 2003, plus 7 percent annual interest.
They claim it’s illegal to spend money collected for education on redevelopment projects.
According to the complaint, Georgia House Bill 1634, passed in 1986, authorized Atlanta to use educational tax money for noneducational purposes, to finance development projects in tax allocation districts – but that was repealed in 1996 by H.B. 1502.
The plaintiffs say claim H.B. 1502 amended the City Charter and killed the city’s power to reallocate education money.
But since then, they say, Atlanta “purportedly established” 10 tax allocation districts, including BeltLine and Perry/Bolton, all of which are illegal, because they were created after the city lost the power to create them.
As of Sept. 30, they claim, the class is owed $54,777,390.55 plus interest.
They demand a “tax refund of all educational taxes illegally levied and collected for non-education purposes in respect of the BeltLine and Perry/Bolton TADs [Tax Allocation Districts].”
They add: “The City of Atlanta’s attempted creation of the BeltLine TAD [Tax Allocation District] and the Perry/Bolton TAD was ultra vires, illegal, null and void and of no force or effect because the attempted creation of such TADs occurred subsequent to the General Assembly’s adoption of the 1996 City Charter, stripping the City of Atlanta of any power to exercise redevelopment powers under the 1985 Redevelopment Powers Law.”
Sherman and Eichler are represented by Robert D. Feagin III.