Sherman v. Atlanta Independent School System

744 S.E.2d 26, 293 Ga. 268, 2013 Fulton County D. Rep. 1686, 2013 WL 2372192, 2013 Ga. LEXIS 493
CourtSupreme Court of Georgia
DecidedJune 3, 2013
DocketS13A0333
StatusPublished
Cited by5 cases

This text of 744 S.E.2d 26 (Sherman v. Atlanta Independent School System) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sherman v. Atlanta Independent School System, 744 S.E.2d 26, 293 Ga. 268, 2013 Fulton County D. Rep. 1686, 2013 WL 2372192, 2013 Ga. LEXIS 493 (Ga. 2013).

Opinion

NAHMIAS, Justice.

This case involves the use of local school taxes for general redevelopment purposes following our decision in February 2008 interpreting the Georgia Constitution’s Educational Purpose Clause in Woodham v. City of Atlanta, 283 Ga. 95 (657 SE2d 528) (2008); the subsequent amendment to the Constitution’s Redevelopment Powers Clause in November 2008; and the repeal and reenactment of the statutory Redevelopment Powers Law in April 2009. Appellant John S. Sherman argues that our holding in Woodham, where we concluded that the proposed use of school taxes to fund bonds for the City of Atlanta’s BeltLine Redevelopment Plan “violates the Educational Purpose Clause,” 283 Ga. at 96, rendered the resolutions, redevelopment plans, and intergovernmental agreements (“local government approvals”) approving the City’s Perry-Bolton and BeltLine tax allocation districts (“TADs”) unconstitutional in their entirety, void ab initio, and unamendable — even by constitutional amendment. Appellees — the Atlanta Independent School System, City of Atlanta, and Atlanta Development Authority — argue in response that Wood-ham invalidated only a particular bond issuance for the BeltLine project and had no effect at all on the constitutional validity of the local government approvals for the BeltLine TAD, much less the Perry-Bolton TAD.

Appellees are wrong. It is clear that, under the law when we decided Woodham in February 2008, the local government approvals for the Perry-Bolton and BeltLine TADs would have been ruled unconstitutional to the same extent that this Court held that the proposed funding for the BeltLine bonds was unconstitutional; at that time, local school taxes could not be used for general redevelopment purposes. But Sherman is also wrong — and decisively so — because the subsequent constitutional amendment and revision of the statute governing TADs changed the applicable law, and those changes were expressly made retroactive with respect to the county, city, and local board of education approvals needed to use school taxes for redevelopment purposes.

Thus, Sherman’s constitutional challenges to the Perry-Bolton and BeltLine TADs lack merit. Sherman’s other arguments, which involve the City’s charter and the trial court’s jurisdiction to amend an interlocutory injunction while a previous appeal in this case was pending, are also meritless. Accordingly, we affirm the trial court’s grant of summary judgment to Appellees' and its denial of partial summary judgment to Sherman.

[269]*2691. Since its enactment, the Georgia Constitution of 1983 has contained, in Article IX, Section II, Paragraph VII (b), a Redevelopment Powers Clause authorizing cities and counties to create tax allocation districts to finance redevelopment, contingent on the General Assembly’s enactment of a general law and a local law and approval of the local law in a local referendum.1 Creating a TAD freezes the assessed value of the real property in the TAD, and for the next up to 30 years, any additional annual property taxes, or “tax allocation increments,” generated as a result of rising property values are diverted to a special fund to pay redevelopment costs. This future revenue stream then can be pledged as security for the issuance of bonds to provide up-front and ongoing capital to spur investment in the TAD.

In 1985, the General Assembly implemented the Redevelopment Powers Clause by enacting the Redevelopment Powers Law, a general law authorizing cities and counties to exercise redevelopment powers. See Ga. L. 1985, p. 1360, §§ 1-3 (codified as amended at OCGA §§ 36-44-lto 36-44-23). Inl986, the General Assembly enacted a local law amending the charter of the City of Atlanta to authorize the City to exercise redevelopment powers, see Ga. L. 1986, p. 4834, §§ 1-3; that local law was approved in a City referendum. Thus, since 1986, the City has been authorized to create TADs to fund redevelopment projects.

This case involves two of the ten TADs created by the City. In 2002, the City Council passed a resolution adopting the Northwest Atlanta Redevelopment Plan and creating the 25-year Perry-Bolton TAD in northwest Atlanta. In 2005, the City Council passed a resolution adopting the BeltLine Redevelopment Plan and creating the 25-year BeltLine TAD encircling the City’s center. In each instance, the City designated the Atlanta Development Authority (“Development Authority”) to serve as the redevelopment agency and authorized the issuance of bonds secured by the tax allocation increments for the TAD. The Atlanta Independent School System (“School System”), through the Atlanta Board of Education (“School Board”), consented to the inclusion of school taxes in the tax allocation increments for each TAD and executed intergovernmental agreements with the City memorializing the terms of the consent. Fulton [270]*270County (the “Count/’) also consented to the inclusion of county property taxes in the tax allocation increments for these two TADs.

In 2006, in accordance with the Revenue Bond Law, OCGA §§ 36-82-60 to 36-82-85, the Fulton County District Attorney filed a petition in the Fulton County Superior Court against the City, the County, and the School System to confirm and validate the issuance of bonds secured by the BeltLine TAD tax allocation increments in an amount not to exceed $200 million. In 2007, the trial court entered an order confirming and validating the bond issuance, but on appeal, this Court reversed. See Woodham v. City of Atlanta, 283 Ga. 95, 96-98 (657 SE2d 528) (2008). We held that the inclusion of school taxes in the BeltLine TAD tax allocation increments violated the Constitution’s Educational Purpose Clause, which restricts the use of local school tax funds to the support and maintenance of public schools, public education, and “activities necessary or incidental thereto.” Ga. Const. of 1983, Art. VIII, Sec. VI, Par. I (b). We explained 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. Although appellees assert that the BeltLine TAD will likely produce future revenue for the school system, such potential benefit “will not suffice where the constitutional authorization for such expenditure is lacking.”

Woodham, 283 Ga. at 97 (citation omitted).

Just three months later, on May 14, 2008, the General Assembly proposed a constitutional amendment to allow school taxes to be used for general redevelopment purposes and projects. See Ga. L. 2008, p. 1211, §§ 1-2. The amendment was ratified at the November 2008 general election and took effect on January 1, 2009.2 The 2008 Amendment revised the Redevelopment Powers Clause to authorize the enactment of a new general law after January 1, 2009, allowing such use of school tax funds “notwithstanding [the Educational Purpose Clause] or any other provision of this Constitution.”3 The 2008 Amendment imposed an additional constitutional requirement [271]

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Bluebook (online)
744 S.E.2d 26, 293 Ga. 268, 2013 Fulton County D. Rep. 1686, 2013 WL 2372192, 2013 Ga. LEXIS 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sherman-v-atlanta-independent-school-system-ga-2013.