Can a Georgia county temporarily borrow money from its SPLOST account to cover other county expenses?

Plain-English summary

The State Auditor asked whether a Georgia county could borrow from its Special Purpose Local Option Sales Tax (SPLOST) account to fund expenditures other than the voter-approved capital projects spelled out in the SPLOST resolution. Attorney General Thurbert Baker said no.

The opinion relies on O.C.G.A. § 48-8-121(a)(1), which directs that SPLOST proceeds "shall be used by the county . . . exclusively for the purpose or purposes specified in the resolution or ordinance calling for imposition of the tax" and "shall not in any manner be commingled with other funds." The AG read the Georgia Supreme Court's SPLOST cases (Johnston, Haugen, Dickey) as a consistent line that strictly enforces this earmarking rule, and treated even temporary inter-fund borrowing as a form of commingling that crosses the statutory line.

Currency note

This opinion was issued in 2007. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What is SPLOST?
A: SPLOST stands for Special Purpose Local Option Sales Tax. It is a 1% county-level sales tax that voters approve in a referendum to fund specific capital projects, such as roads, courthouses, jails, schools, or water systems. The list of projects appears in the resolution that calls the referendum, and the proceeds can only pay for those projects.

Q: Why did the AG say a county could not borrow from SPLOST proceeds even temporarily?
A: The AG read O.C.G.A. § 48-8-121(a)(1) literally. The statute says proceeds "shall be used . . . exclusively" for the listed projects and "shall not in any manner be commingled with other funds." Borrowing from SPLOST to fund anything else is, in the AG's view, a form of commingling that ignores the "exclusively" command, even if the county intends to repay the SPLOST account later.

Q: What did the Georgia Supreme Court cases the opinion cites actually hold?
A: The opinion stacked three cases that all strictly limit SPLOST. Johnston v. Thompson (2006) said a county could not use technology-improvement SPLOST funds to give laptops to students. Haugen v. Henry County (2004) said no SPLOST money is "excess" until every approved project is finished. Dickey v. Storey (1992) said a county could not change the location of a project named in the SPLOST resolution. Together they signal that courts read the SPLOST statute very narrowly.

Q: What about interest earned on the SPLOST account?
A: The AG had previously opined in 2001 Op. Att'y Gen. 2001-3 that interest accrued on the separate SPLOST account is also restricted. The interest must stay in the SPLOST account and be used only for the approved projects. The 2007 opinion treated this as a parallel rule supporting the no-borrowing conclusion.

Q: When did the AG say a county could withdraw SPLOST money?
A: Only "for the payment of expenses incurred with regard to the projects approved in the resolution or ordinance calling for the imposition of the tax." That is the entire authorized use. Anything else, including a short-term loan to the general fund, fell outside the statute as the AG read it.

Background and statutory framework

Georgia's SPLOST statute (O.C.G.A. §§ 48-8-110 through 48-8-121) gives counties a tool to fund big-ticket capital projects without raising property taxes, on the condition that voters approve the specific project list in advance. The structural protections are: a separate account, a no-commingling rule, and an exclusive-use rule. Together those create what the AG described as a strict statutory channel.

The 2007 opinion did not break new ground; it pulled together the existing case law and the office's earlier 2001 opinion on accrued interest, then applied the same logic to inter-fund borrowing. The takeaway in the opinion's view: a county that borrows from SPLOST, even with the intention of repaying, has already violated the no-commingling rule the moment the funds leave the account for an unauthorized purpose.

Citations and references

Statutes:
- O.C.G.A. § 48-8-110(1), SPLOST authorization (counties)
- O.C.G.A. § 48-8-111, SPLOST referendum and resolution requirements
- O.C.G.A. § 48-8-121(a)(1): exclusive-use and no-commingling rule

Cases:
- Johnston v. Thompson, 280 Ga. 611 (2006), SPLOST for school technology cannot be redirected to student laptops
- Haugen v. Henry County, 277 Ga. 743 (2004), no funds are "excess" until all approved projects are complete
- Dickey v. Storey, 262 Ga. 452 (1992), county may not move a SPLOST project to a different site

Prior AG opinions:
- 2001 Op. Att'y Gen. 2001-3: interest on SPLOST account is also restricted to approved projects

Source

• Landing page: https://law.georgia.gov/opinions/2007-5
• Original PDF: not linked from landing page

Original opinion text

You have asked whether it is permissible for a county to borrow from county Special Purpose Local Option Sales Tax (hereafter SPLOST) proceeds in order to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes. See O.C.G.A. §§ 48-8-110(1) and 48-8-111. In pertinent part the statute governing the use of SPLOST proceeds provides as follows: The proceeds received from the tax authorized by [O.C.G.A. § 48-8-111] shall be used by the county . . . exclusively for the purpose or purposes specified in the resolution or ordinance calling for imposition of the tax. Such proceeds shall be kept in a separate account from other funds of such county . . . and shall not in any manner be commingled with other funds of such county . . . . O.C.G.A. § 48-8-121(a)(1) (emphasis added). The Georgia Supreme Court has had occasion to construe the statutory provision set out above in a number of cases. In each such case, the court strictly construed the statutory language with regard to the permissible uses of SPLOST funds. See Johnston v. Thompson, 280 Ga. 611 (2006) (county may not use funds from SPLOST imposed to make school system wide technology improvements to provide lap top computers to all middle and high school students); Haugen v. Henry County, 277 Ga. 743 (2004) (county may not identify any SPLOST funds as "excess" until all projects called for in the resolution are complete); Dickey v. Storey, 262 Ga. 452 (1992) (county may not change the site specified in the resolution calling for the imposition of the tax for the purpose of building a government office and center complex). In addition, in responding to a question regarding the permissible uses of interest accrued on an account maintained to account for SPLOST revenues, I have previously opined that the statutory restrictions set out above require that all accrued interest on the separately maintained SPLOST account also be used exclusively for the approved projects and likewise kept in the separate account maintained for SPLOST revenues. 2001 Op. Att'y Gen. 2001-3. The plain language of the statute as well as prior construction of statutory language regarding the use of SPLOST funds requires that the SPLOST funds be kept in an account separate from other county funds and withdrawn only for the payment of expenses incurred with regard to the projects approved in the resolution or ordinance calling for the imposition of the tax. Therefore, it is my official opinion that a county may not borrow from county SPLOST proceeds to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes. Prepared by: Michele M. Young Assistant Attorney General