Yesterday, while Savannah was in full St. Patrick’s Day celebration, the Savannah Morning News posted an editorial urging Skidaway residents to vote no on the measure to create an island city. The paper joins a rather vocal and influential group of Skidaway residents in opposing the measure.
Skidaway Island is dominated by the mega-subdivision, The Landings, which is a gated community containing six golf courses, two marinas, and miles of trails and golf cart paths. About 8,300 people call the island home, with the majority living in The Landings, and others in the even more exclusive Modena Island community or the Green Island neighborhood. In local terms, folks on Skidaway are considered “rich”, relative to their Chatham neighbors.
Thus, with the homes more expensive than those in the rest of Chatham, there are those that believe incorporation would allow them to keep their tax money at home, and thus, lower their property tax bill. A few added words of caution on this logic are warranted for those heading to the polls on Tuesday.
Incorporation of Skidaway Island would be for county services only. The state constitution bars creation of independent school districts. In reviewing friends’ Skidaway property tax record that includes homestead exemption, they pay 59-64% of their property tax to Chatham County Schools. Thus, any tax savings must be squeezed from roughly one third of each current property tax bill.
Additionally, there is the consideration that the Island is currently developed as low density residential, with most of the development complete and mature. One of the benefits of many of Georgia’s newer cities is that they are in rapidly growing areas with an established commercial base.
Growth is important when considering residential taxes, because new construction is usually valued considerably higher than existing homes. Thus, the new folks pay disproportionately higher taxes per capita than the current residents. That works until the growth stops, and then annual tax increases have to spread evenly over all residents.
This is especially important to a community like Skidaway island because there is very little commercial or industrial property on the island. The tax base is almost entirely residential, and almost all of this is older construction. A rule of thumb from my urban economics graduate class decades ago is that residential customers demand two times the services they pay in property taxes, while retail generates a dollar for every dollar in police/fire etc they consume. Office and industrial space usually makes up the difference by consuming only $.60 in services for every dollar they pay in taxes.
Thus, while residents may be able to save a few bucks initially, something the opposition group openly questions, they should also consider that governments tend to grow, and that growth needs a tax base to feed it.
We know commercial land is important based on two recent attempts to develop cities in the metro Atlanta area. An epic battle raged between those trying to establish the cities of Tucker and Lavista Hills over which city would get the commercial properties around Northlake Mall. Both cities claimed they needed the mall to be viable. Eventually there was a compromise to split the area, with Tucker going on to pass, while LaVista Hills did not muster the support of voters.
More directly, the City of Eagle’s landing in Henry County was put to voters by taking away a significant portion of the commercial property in the existing city of Stockbridge. Voters also rejected this measure.
It’s clear that those forming new cities understand the importance of commercial property and/or the ability to add growth through density. The current lifestyle on Skidaway Island eschews both.
Those voting on Tuesday need to decide if a potential short term savings of maybe $100 on their tax bill is really worth the future need to add density or additional commercial development and the traffic that generates in order to further bolster local control. The alternative would be the status quo, which would let the mature communities of Skidaway Island benefit from the residential and commercial growth occurring in the tax base in other parts of Chatham County.