---
title: Ga. Const. Art. IX, Sec. V, Para. I. Debt limitations of counties, municipalities, and other political subdivisions.
collection: code
id: ga-const:art-ix-sec-v-para-i
cite_as: Ga. Const. Art. IX, Sec. V, Para. I
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---

# Ga. Const. Art. IX, Sec. V, Para. I. Debt limitations of counties, municipalities, and other political subdivisions.

A constitution provision shown as in force is in force as printed in the volume. A court decision can make a printed provision unenforceable without changing the volume, and the volume does not record that.

(a) The debt incurred by any county, municipality, or other political subdivision of this state, including debt incurred on behalf of any special district, shall never exceed 10 percent of the assessed value of all taxable property within such county, municipality, or political subdivision; and no such county, municipality, or other political subdivision shall incur any new debt without the assent of a majority of the qualified voters of such county, municipality, or political subdivision voting in an election held for that purpose as provided by law.

(b) Notwithstanding subparagraph (a) of this Paragraph, all local school systems which are authorized by law on June 30, 1983, to incur debt in excess of 10 percent of the assessed value of all taxable property therein shall continue to be authorized to incur such debt.

## Cross References

Elections to incur or retire bonded debts, § 20-2-430 et seq., § 36-80-10 et seq., and § 36-82-1 et seq. Power to incur or retire public debt, §§ 36-34-6 and 36-80-13. Computing public indebtedness, § 36-82-8.

## Editor's Notes

The constitutional amendment proposed in Ga. L. 1987, p. 1598, § 1, which would have added subparagraph (c) authorizing any municipality of the State of Georgia having a population of 400,000 or more to incur an additional $8 million per annum in bonded indebtedness without the necessity of a referendum, was defeated in the general election on November 8, 1988.

## Law Reviews

For article surveying important general legal principles of municipal and county government purchasing and contracting in Georgia, see 16 Mercer L. Rev. 371 (1965). For article discussing financial implications of municipal annexations, see 2 Ga. L. Rev. 35 (1967). For article, ‘‘Discretion in Georgia Local Government Law,’’ see 8 Ga. L. Rev. 614 (1974). For article, ‘‘Binding Contracts in Georgia Local Government Law: Recent Perspectives,’’ see 11 Ga. St. B.J. 148 (1975). For annual survey of local government law, see 38 Mercer L. Rev. 289 (1986). For annual survey of local government law, see 57 Mercer L. Rev. 289 (2005). For survey article on local government law, see 60 Mercer L. Rev. 263 (2008).

For note discussing restrictions on the creation of public purpose corporations, see 8 Ga. L. Rev. 680 (1974).

For comment on Miller v. Head, 186 Ga. 694, 198 S.E. 680 (1938), see 1 Ga. B.J. 40 (1939).

## 1976 Constitution.

Art. IX, Sec. VII, Para. I.

## In Order for a Municipal corpora-Local Amendment Levying Tax Valid.

— A local amendment to Art. VII, Sec. IV, Para. II of the 1945 Georgia Constitution, authorizing a county to levy a tax for water and sewerage purposes, was valid despite any conflict with the debt limitations clause. Copeland v. State, 268 Ga. 375, 490 S.E.2d 68 (1997). mer Civil Code 1910, § 442 (see now O.C.G.A. § 36-82-3), and that section must be construed consistently with this paragraph. Chapman v. Sumner Consol. Sch. Dist., 152 Ga. 450, 109 S.E. 129 (1921); Cowart v. City of Waycross, 159 Ga. 589, 126 S.E. 476 (1925) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

This paragraph does not operate as a limitation upon taxing power of a municipality. Commissioners of Habersham County v. Porter Mfg. Co., 103 Ga. 613, 30 S.E. 547 (1898); City of Waycross v. Tomberlin, 146 Ga. 504, 91 S.E. 560 (1917) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

This paragraph applies to elections for bonds, and not to elections authorizing levy of an additional educational tax in local school districts under Ga. Const. 1976, Art. VIII, Sec. VII, Para. I (see Ga. Const. 1983, Art. VIII, Sec. VI, Para. I). Crye v. Pearce, 175 Ga. 85, 165 S.E. 121 (1932) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

Purpose of Art. 3, Ch. 82, T. 36. — The Revenue Bond Law, Ga. L. 1937, p. 761 (see now O.C.G.A. Art. 3, Ch. 82, T. 36), is designed to provide for self-liquidating projects and the revenue certificates contemplated are not to be a charge against the general credit of the county or municipality. The liability is to be satisfied only from revenues produced by the undertaking, and under specific terms of the statute the political division will never be required to aid in its retirement with funds derived from any other source, and is in fact prohibited from doing so. The article is not unconstitutional by virtue of violating the constitutional limitation on municipal debts. Miller v. Head, 186 Ga. 694, 198 S.E. 680 (1938), commented on in 1 Ga. B.J. 40 (1939).

Debts under Art. 3, Ch. 82, T. 36 not

## Paragraph Limits Operation of Fordebts of Political Subdivision.

Revenue anticipation certificates issued under the Revenue Bond Law, Ga. L. 1937, p. 761 (see now O.C.G.A. Art. 3, Ch. 82, T. 36), do not subject the political subdivision of this state issuing the same to any pecuniary liability thereon and are therefore not debts against such political subdivision within the meaning of the constitutional provision limiting such indebtedness. Fort Oglethorpe v. Catoosa County, 80 Ga. App. 188, 55 S.E.2d 752 (1949).

## Debt Not Regulated by This Clause.

County’s promise to pay for the stadium project bonds was not a debt regulated by the Georgia Constitution’s debt limitation clause as the promise was made as part of a constitutionally valid intergovernmental contract. Savage v. State of Ga., 297 Ga. 627, 774 S.E.2d 624 (2015).

## Taxpayers Right to Injunction.

Taxpayers of the city have such an interest in the municipal funds arising from taxation that they may enjoin the creation of illegal debts by the corporation, or their payment. Hudson v. Mayor of Marietta, 64 Ga. 287 (1879), overruled on other grounds, City Council v. Dawson Waterworks Co., 106 Ga. 719, 32 S.E. 916 (1899); Renfroe v. City of Atlanta, 140 Ga. 81, 78 S.E. 449, 45 L.R.A. (n.s.) 1173 (1913).

## Construction of Paragraph’s Exception Clause.

The following words, ‘‘except as in this Constitution provided for,’’ lift out of the restrictions and limitations provided in this paragraph the full content of Ga. Const. 1976, Art. IX, Sec. VI, Para. I (see Ga. Const. 1983, Art. IX, Sec. III, Para. I), as the constitutional authorization of debt not prohibited by the limitation and inhibition contained in this paragraph. Sheffield v. State Sch. Bldg. Auth., 208 Ga. 575, 68 S.E.2d 590 (1952) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

The County Building Authority Act did not violate Ga. Const. 1976, Art. IX, Sec. VII, Para. I (see Ga. Const. 1983, Art. IX, Sec. V, Para. I) as the Act and agreements entered into pursuant to it, in regard to the acquisition and construction of certain county buildings, were validated by the intergovernmental contracts provision, Ga. Const. 1983, Art. IX, Sec. III, Para. I. Building Auth. v. State, 253 Ga. 242, 321 S.E.2d 97 (1984).

Import of 1927 constitutional

## Amendment.

The constitutional amendment of 1927 is not merely an addition to the ‘‘casual deficiency’’ provision of this paragraph, but it confers upon the counties the right to borrow money in an amount not exceeding the fixed limitation, to be used for any lawful county purpose, and not merely to supply casual deficiencies of revenue. Atlanta Distrib. Terms., Inc. v. Board of Comm’rs, 177 Ga. 250, 170 S.E. 52 (1933) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

## ‘‘Casual Deficiency’’ Defined.

The phrase, ‘‘casual deficiency’’ means some unforeseen or unexpected deficiency, or an insufficiency of funds to meet some unforeseen and necessary expense. Lewis v. Lofley, 92 Ga. 804, 19 S.E. 57 (1894); Hall v. County of Greene, 119 Ga. 253, 46 S.E. 69 (1903); Williams v. Sumter County, 21 Ga. App. 716, 94 S.E. 913, cert. denied, 21 Ga. App. 825 (1918); Citizens Bank v. Rockdale County, 152 Ga. 711, 111 S.E. 434 (1922); Atlanta Distrib. Terms., Inc. v. Board of Comm’rs, 177 Ga. 250, 170 S.E. 52 (1933).

## Paragraph Not Self-executing.

Since this paragraph, concerning the incurring of debts by a municipality is not self-executing, the General Assembly passed an enabling Act, former Code 1933, § 87-201 et seq., putting this provision into operation. McKnight v. City of Decatur, 200 Ga. 611, 37 S.E.2d 915 (1946) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

## O.c.g.a. § 36-82-3.

Former Code 1933, § 87-203 (see now O.C.G.A. § 36-82-3), providing for elections to approve issue of bonds must be given effect, subject to change as made by this paragraph in reference to the proportion of qualified voters necessary to authorize a bond issue; and no further enabling Act is necessary. McKnight v. City of Decatur, 200 Ga. 611, 37 S.E.2d 915 (1946).

Former Code 1933, § 87-203 (see now O.C.G.A. § 36-82-3) should be construed General Consideration (Cont’d) consistently with this paragraph as to the number of eligible voters required to approve the issuance of bonds. McKnight v. City of Decatur, 200 Ga. 611, 37 S.E.2d 915 (1946) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

## Contract Between County and Cities.

Trial court did not err in granting a county summary judgment in cities’ action for breach of an intergovernmental agreement (IGA) the parties entered into pursuant to the Homestead Option Sales and Use Tax Act (HOST), O.C.G.A. § 48-8-100 et seq., because the IGA was not a valid intergovernmental contract under the Intergovernmental Contracts Clause of the Georgia Constitution, Ga. Const. 1983, Art. IX, Sec. III, Para. I(a) since the focus and clear purpose of the IGA was to provide a formula for the distribution of the HOST revenues, and the IGA could not be deemed an agreement for the provision of authorized ‘‘services’’; the IGA was an agreement about how to divide and distribute HOST revenues between the county and the cities, with the cities agreeing to expend the monies disbursed solely for capital outlay projects to be located within the geographical boundaries of the county and to be owned, operated, or both either by the county, one or more cities or any combination thereof, and the fact that the IGA required the cities to expend the tax proceeds in accordance with the mandates of the Homestead Option Sales and Use Tax Act, O.C.G.A. § 48-8-102, did not transform it into either a contract for services or one for the use of facilities. City of Decatur v. Dekalb County, 289 Ga. 612, 713 S.E.2d 846 (2011).

Cited in Mayor of Milledgeville v. Jeanes, 42 Ga. App. 105, 155 S.E. 218 (1930); Anchor Duck Mills v. Maddox, 171 Ga. 495, 156 S.E. 192 (1930); Sharpe v. Alston Consol. Sch., 173 Ga. 345, 160 S.E. 374 (1931); Smith v. Board of Educ., 174 Ga. 735, 164 S.E.2d 41 (1932); City of Abbeville v. Eureka Fire Hose Mfg. Co., 177 Ga. 204, 170 S.E. 23 (1933); Madronah Sales Co. v. Wilburn, 180 Ga. 837, 181 S.E. 173 (1935); Moore v. Howard, 181 Ga. 605, 183 S.E. 495 (1936); Dortch v. Southeastern FairAss’n, 182 Ga. 633, 186 S.E. 685 (1936); West v. Trotzier, 185 Ga. 794, 196 S.E. 902 (1938); Westbrooks v. Suwanee Consol. School Dist., 58 Ga. App. 509, 199 S.E. 240 (1938); Pierce v. Powell, 188 Ga. 481, 4 S.E.2d 192 (1939); Wallace & Tiernan Co. v. Williams, 192 Ga. 149, 14 S.E.2d 747 (1941); Lawson v. City of Moultrie, 194 Ga. 699, 22 S.E.2d 592 (1942); DeJarnette v. Hospital Auth., 195 Ga. 189, 23 S.E.2d 716 (1942); Lumpkin v. State, 73 Ga. App. 229, 36 S.E.2d 123 (1945); Nelms v. Stephens County Sch. Dist., 201 Ga. 274, 39 S.E.2d 651 (1946); Alexander v. Fulton County, 202 Ga. 42, 41 S.E.2d 423 (1947); Board of Comm’rs of Rds. & Revenues v. Bond, 203 Ga. 558, 47 S.E.2d 511 (1948); Smith v. City Council, 203 Ga. 511, 47 S.E.2d 582 (1948); Cook v. Davis, 178 F.2d 595 (5th Cir. 1949); City of Atlanta v. Anglin, 209 Ga. 170, 71 S.E.2d 419 (1952); Smith v. Hospital Auth., 210 Ga. 801, 82 S.E.2d 827 (1954); Posey v. Dooly County Sch. Dist., 215 Ga. 712, 113 S.E.2d 120 (1960); State v. Chatham County, 103 Ga. App. 390, 119 S.E.2d 120 (1961); Cason v. State, 217 Ga. 339, 122 S.E.2d 232 (1961); Jamerson v. Campbell, 217 Ga. 766, 125 S.E.2d 205 (1962); Barrow v. Jefferson County, 218 Ga. 681, 130 S.E.2d 129 (1963); Stephenson v. State, 219 Ga. 652, 135 S.E.2d 380 (1964); Hollifield v. Vickers, 118 Ga. App. 229, 162 S.E.2d 905 (1968); City of Jonesboro v. Clayton County Water Auth., 136 Ga. App. 768, 222 S.E.2d 76 (1975); Frazer v. City of Albany, 245 Ga. 399, 265 S.E.2d 581 (1980).

Creation of Debt

1. In General

State authorities, lawfully created, are not subject to the restrictions of this paragraph and Ga. Const. 1976, Art. IX, Sec. VIII, Para. I (see Ga. Const. 1983, Art. IX, Sec. VI, Para. I). Thompson v. Municipal Elec. Auth., 238 Ga. 19, 231 S.E.2d 720 (1976) (see Ga. Const. 1983, Art. IX, Sec. V, Para. I).

Replication insufficient to prevent


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