A proposed $5 million bond for road work in Newton County has stalled after several county supervisors announced they had “cold feet” about moving forward with the plan.
In a May 21 Board of Supervisors meeting, Beat 5 supervisor Jacky Johnson and Beat 4 supervisor Charles Godwin said they were having second thoughts about taking on long-term debt.
“I’m getting cold feet,” Johnson said.
The county has been working to issue a $5 million general obligation bond to repair and improve the county’s dilapidated roads. The bond would be for a 20-year term and would require annual payments of approximately $460,000.
Under the county’s plan, the bond payments would be made using Internet Use Tax revenue, of which 15 percent collected is split amongst the state’s 81 counties. Earlier this year, Newton County received about $125,000 with another payment of $125,000 expected later this month. The new tax revenue is being phased in over a 5-year period, after which Newton County expects to add about $500,000 per year.
Johnson said the current law protects the counties’ 15 percent allocation for 10-years, but he worried that might change before Newton County could pay off the bond.
“That’s what the law says, but laws can change,” he said.
County Administrator Steve Seale said the county would be looking at about 3 mills in tax revenue to make the bond payment if the use tax dried up.
Godwin said Beat 4 is currently making payments on about $504,000 in bond debt. Signing his constituents up for an additional $5 million in debt would be irresponsible, he said, adding he too had concerns about the Internet Use Tax being reallocated by the Legislature.
“I’ve never seen Washington or Jackson shy away from taking money they originally brought to the table,” he said.
State revenues have declined significantly during the coronavirus pandemic, while internet shopping has increased. Both Johnson and Godwin expressed concern the Legislature, having to make tough choices for upcoming budgets, could decided to dip into the Internet Use Tax money as an additional source of revenue.
Johnson said he was convinced not to proceed with the bond issue. Godwin said he had reservations about moving forward but had not decided which way to vote.
“I’m on the fence,” he said, adding his concerns weren’t so much with the current legislators but those that might succeed them later on.
Supervisors Kenneth Harris, Charles Moulds and Joe Alexander said they were still planning to proceed with the bond issue; however they said they would not proceed with a 3-2 vote, obligating Johnson and Godwin to the debt against their will.
The board voted to table the matter until June 1, allowing supervisors more time to review the numbers and come to a decision.
Should Johnson and Godwin decide not to move forward with the bond, the county would need to start the process over again, which would add another 2-3 months before the money became available.
