SPLOST Frequently Asked Questions

  • What is an E-SPLOST (Special Purpose Local Option Sales Tax for Education)?

    A. A Special Purpose Local Option Sales Tax for education (E-SPLOST) allows local school districts to collect a one-cent sales tax to help fund capital improvements, including debt repayment for capital projects. It cannot be used for operating expenses or school district salaries.

    Q. Is this a new tax?

    A. E-SPLOST is not a new or additional tax. Since 1997, voters have consistently supported the local school system through resolutions, approving six E-SPLOST programs (1997, 2001, 2006, and 2011, 2016, 2021). Over the decades, these programs have paid down debt, purchased land, helped construct new schools, built and equipped hundreds of classrooms, helped maintain and renovate existing facilities, and supported critical technology upgrades.

    Q. Who pays the one-cent sales tax?

    A. SPLOST is a consumption tax. That means anyone who makes a purchase or does business in Paulding County pays the SPLOST tax. Regardless of whether you live in Paulding or are simply traveling through the county for a single day, everyone who does business in Paulding pays the Special Purpose Local Option Sales Tax every time they make a retail purchase.

    Q. How long does an E-SPLOST last?

    A. Collections are for a maximum of five years or upon collection of the maximum amount of voter-approved revenue, whichever occurs first. E-SPLOST VI collections begin April 2021 and continue until March 2026 or until $113,250,182 is collected.

    Q. Can E-SPLOST funds be used for operating budget shortfalls or salaries?

    A. Funds cannot be used for operating expenses. Georgia law is specific about what school districts may propose to voters as potential E-SPLOST-funded projects. The law states that E-SPLOST funds may be used for school facility improvements, to pay for capital projects, or to retire debt. E-SPLOST funds may not be used for operating expenses such as salaries.

    Q. What is bond debt? How is it paid?

    A. When a school district undertakes capital projects (i.e. land acquisition, new facility construction, existing facility renovation, etc.), a substantial portion of the cost must be allocated in advance of the project. To acquire these up-front funds, districts may ask voters to approve the sale of school bonds as a source of revenue. When bonds are sold, districts receive money in advance, and the amount of bond debt must be repaid by the district over a period of years through tax collections. An easy example is to think of school bond debt as similar to a home mortgage which allows the homeowner to acquire the home and repay over a period of years.

    Generally, there are two funding sources that districts use for bond payments: property tax revenues (bond millage / ad valorem), and E-SPLOST revenues.

    Q. Who pays the millage rate/ad valorem tax?

    A. Homeowners, business owners - anyone who pays property tax - pays the millage rate through ad valorem taxes. Before E-SPLOST was an option, school districts typically paid for capital projects by issuing long-term bonds that had to be paid back with interest over many years. This debt was paid exclusively by property owners through the millage rate / ad valorem tax. E-SPLOST works differently, since it is a one-cent sales tax on all retail purchases. Money can be used for capital projects as it is collected, and can even be used to pay off existing bond debt. With E-SPLOST, there is no long-term debt and there is no interest.

    Q. What is the total amount of bond debt owed by the District?

    A. The school district has not issued long-term bonds since 2008. Proceeds from E-SPLOST VI will be used to pay down approximately $41 million of remaining long-term bond debt that was incurred for previous capital projects. After ESPLOST VI, approximately $52 million in long-term bond debt will remain. All of this long-term bond debt was incurred prior to E-SPLOST being an option for school districts, and when bonds were issued during a time of extremely rapid enrollment growth in the early 2000s.