Voters in Atlanta approved two bond referendums totaling $406 million and a sales tax increase measure.
The May 24 election results authorize the city to issue up to $213.01 million of general obligation bonds from one measure and $192.99 million from the other.
Both measures passed with a more than 4-to-1 margin.
Mohamed Balla, Atlanta’s chief financial officer, said the city was thankful for residents’ enthusiastic approval of the referendums.
“The measures include the approval of a total of $400 million public improvement bonds for vertical and horizontal infrastructure such as recreation, public safety and arts projects across the city,” Balla told The Bond Buyer.
Proceeds from the larger public facilities bond measure issue will go toward constructing, improving, and repairing public safety facilities, recreational, aquatic and greenhouse facilities, a Center for Diversion Services, buildings and equipment for use by Police, Fire and Rescue and Emergency Medical Services departments and related public improvements and the cost of compliance with the Americans with Disabilities Act of 1990 for such facilities and improvements.
The measure passed by an 82.72% to 17.28% margin, according to the unofficial results.
Proceeds from the smaller roads, pathways, parks and playgrounds bond measure will go toward acquiring, planning, constructing, and maintaining roads, sidewalks, pathways, trails and related transportation, park and playground improvements, including public sidewalks, traffic control infrastructure and equipment, curbing, bridges and viaducts, greenway systems, trails, playgrounds, pools, paths, bicycle and transit lanes, and safety lighting and the cost of compliance with the AWDA.
The measure passed by an 84.57% to 15.43% margin, according to the unofficial results.
Atlanta's general obligation bonds are rated Aa1 by Moody's Investors Service and AA-plus by Fitch Ratings.
The Atlanta City Council in December referred both bond measures to the ballot box.
Voters in a separate measure also approved a 0.4% sales tax renewal that will last for up to five years, and will provide funding for transportation and congestion reduction projects. The tax is expected to raise up to $350 million for various transportation projects.
The measure passed by a 68.17% to 31.83% margin, according to the unofficial results.
Balla also said he is pleased about the renewal of the transportation special sales tax, which will put $350 million toward vital transportation projects.
“The voters' approval will allow us to make significant investments in the city's infrastructure and an equitable future economy,” he said.
The tax renewal passed with more than 69% in favor.
In March 2021, the Atlanta City Council passed legislation allowing up to $100 million of municipal bonds to be issued through a special service district that would to fund completion of the
When it's complete in 2030, boosters say the 22-mile trail loop will deliver a total economic impact of $10 billion and almost 50,000 permanent jobs.
In December, Siebert Williams Shank & Co. priced $191.92 million of the city’s GO bonds. The deal consisted of Series 2021B various purpose tax-exempt GOs and Series 2021C taxable refunding GOs.
Additionally, Loop Capital in September priced the city’s $335.870 million of tax-exempt airport general revenue refunding bonds consisting of Series 2021A bonds not subject to the alternative minimum tax, Series 2021B non-AMT bonds and Series 2021C AMT bonds.
Since 2011, the city has sold about $7.3 billion of bonds, with the most issuance occurring in 2015 when it offered $1.5 billion. It sold the least amount of debt in 2016, when it issued $179 million.
Across Georgia, the employment picture has been improving.
In April, 19,000 jobs were added in Georgia, the state government said, while revised data for March show a gain of 18,200 jobs, up 6,100 from the 12,100 gain initially reported.
The state’s unemployment rate remained at a record low of 3.1% in April, with those employed rising by 20,516.
In the Atlanta Metropolitan Statistical Area, the unemployment rate fell to 2.4% in April from 3.2% in March; a year ago the unemployment rate stood at 4.1%. The number of jobless falling to 77,387 in April from 104,663 in March.
Wells Fargo Securities said that surging gasoline prices and higher inflation may become a major challenge to Georgia's economy.
“Atlanta-area workers face some of the longest commutes in the nation and spend more per person on gasoline than the national average,” Wells Fargo's Economics Department noted in a report. “Soaring food prices and the recent spike in rents also present a problem for many Georgians. The Consumer Price Index for Atlanta is currently up 10.8% from April of last year, which is 2.5 percentage points more than the nation as a whole and the second largest gain in the nation after Phoenix (11.0%).”
Wells Fargo said inflation has outpaced wage growth and consumers are now starting to cut back on discretionary purchases.
“Several major retailers warned of diminishing sales and building inventories, which may soon fall back on Georgia's outsized wholesale trade, warehousing and transportation industries,” the report warned.
Talk of a recession has increased, as the financial markets have sold off as interest rates have increased, the report said.
“Our own assessment puts the odds of recession over the next 18 months at around 30%,” Wells Fargo said, noting however that there is still a long list of positives for the Peach State.
“Households are sitting on more than $2 trillion in excess savings and corporate balance sheets on the whole are in very good shape. There is also extensive pent-up demand for automobiles and light trucks and most other consumer durable goods,” Wells Fargo said. “While rising interest rates will put some of those purchases on hold, supply still appears to be a bigger obstacle to stronger sales than demand."
The report noted that typically, most of the impact from rising interest rates hits the economy between a year to 18 months.
"That would put the timing of a recession somewhere around the middle of next year or in early 2024. We currently have economic growth slowing to less than a 2% pace during the second half of next year, which would be the soft landing the Fed is seeking,” Wells Fargo said.
Georgia’s Labor Commissioner Mark Butler said the trade and transportation sector exceeded 1 million jobs for the first time in the state’s history.
The trade and transportation sector saw a gain of 11,600 jobs in April, rebounding from an 88,500-job deficit at the height of the COVID-19 pandemic in April 2020.
More than half a million of these jobs come from the retail trade sector, which was one of the hardest hit sectors during the pandemic, losing almost 65,000 jobs at the height of COVID-19.
“Much of that growth stems from strong consumer demand for goods and services, as seen in additional job increases in accommodation and food services and administrative and support services," Butler said in a statement.
