News Feature | June 16, 2020

Atlanta's Surprisingly Popular Solution To Water And Sewer Improvements: Sales Tax

Peter Chawaga - editor

By Peter Chawaga


Though it’s hard to imagine calling a city tax “popular,” a recent vote in Atlanta indicated that a vast majority of residents favor renewing a 1 percent sales and use tax that would raise money for water and sewer efforts.

The municipal options sales tax (MOST), which was originally imposed in October 2004, will be reinstated for a maximum of four years in order to raise $750 million for the city’s drinking water and wastewater services. Following a primary election earlier this month, more than 71 percent of voters cast “yes” ballots to renew it.

“The tax helps pay for an estimated $4 billion in investments to the city’s water and sewer improvements as mandated by its two federal consent decrees,” The Neighbor reported. “The tax has brought in over $1.8 billion in revenue since October 2004 … and its ‘revenue has staved off a 25% increase in water/sewer rates.’”

The Atlanta Department of Watershed Management credits the MOST tax with helping to fund the repair and replacement of over 387 miles of sewer infrastructure, a dramatic reduction in the number and volume of sewer spills, and other sewer system improvements that have supported $5 billion in development over the years.

The tax also appears to be a necessary funding lifeline in a place where rates are already steep.

“Among the nation’s 50 largest cities, Atlanta already has the highest monthly residential sewer bill (an average of $140) for typical residential water services … and the country’s third highest monthly combined water/sewer bill (just under $200),” according to The Neighbor.

By transporting some of this financial burden to a sales tax, the city has found a way to source contributions from those who utilize its water and wastewater infrastructure but are not technically ratepayers.

“This is really the only available way to capture revenue from people who use the system but don’t live here,” Howard Shook, a city councilman, told The Neighbor. “They work here; they shop here; they visit here. They leave their mark and wear and tear on the system but don’t pay into it as the ratepayers do.”

To read more about how drinking water and wastewater utilities pay for their operations, visit Water Online’s Funding Solutions Center.