Home » Taxes
Category Archives: Taxes
The county is on the precipice of setting in motion a serious of events that could substantially raise your property taxes.
It has come to light that if the county puts a SPLOST referendum on the ballot this November, and it passes, the property assessment freeze will cease to be in effect. We know this now based on a recent review by legislative counsel of HB 596. The legal opinion concluded that:
“…HB 596 serves to suspend the homestead valuation freeze currently in effect in DeKalb County if the new HOST and a Splost are approved in the November election.”
That means that 10 years of increases in your property value, which have been shielded from county and city taxes, will instantly become taxable. You will be providing the county and cities with a sales tax and property tax windfall.
As you know, I have expressed my opposition to the SPLOST because the county’s project list shortchanges real needs (paving and public safety) while spending heavily on pet projects.
Now, the stakes are even higher. At this point, even if the project list was perfect, bringing this SPLOST forward for a vote in November is irresponsible. To go forward would mean a devastating tax increase on 10 years of property value growth that has been shielded.
Unfortunately, the county has asked the cities to support the SPLOST referendum. I have been disappointed that, even before the HB 596 problem became apparent, many cities have already agreed to support the county.
If the county can get every single city to agree, they can extend the tax for another year – 6 years in total. Many city council members from cities in District 1 have expressed to me that if they agree to an “Intergovernmental Agreement” (IGA), they’ll get a more favorable distribution of the SPLOST tax revenue. The members often tell me that they have suggested the county improve its project list. I’m sure the county has taken their suggestion seriously.
Keep in mind, for every dollar of sales tax collected, 75-cents will go to the county and 25-cents will get divided up between the cities (Decatur, Lithonia, Pine Lake, Chamblee, Clarkston, Doraville, Tucker, Brookhaven, Dunwoody, and Stone Mountain). For example, Brookhaven and Dunwoody will receive approximately 7-cents from each dollar of SPLOST. Nonetheless, they believe it is in their cities interest to get a small increase in their SPLOST revenue, even if 75% of what you are paying is going to the wasteful county project list. It’s like thanking a pickpocket for giving you a stick of gum while he takes your wallet.
But now, we are a long way from haggling how to divide up a few cents on the margin. We are at the point where enacting a SPLOST will trigger a massive property tax increase.
Enter the Intergovernmental Agree (IGA) issue. The only city that has yet to sign on and execute an IGA is Dunwoody. If Dunwoody, agrees to move forward with an IGA, then your risk for a sustained property tax increase just got bigger. If Dunwoody agrees to the IGA, the county can call the SPLOST referendum in November, and because all cities will have agreed, the term of the sales tax will be extended to 6 years.
Dunwoody City Council will meet on Monday, July 18th, to decide whether or not to sign the county’s IGA. Those that want to sign the IGA have suggested that it’s good for Dunwoody because it improves their SPLOST revenue by $1.5 million over the 6 year period – the county’s “sweetener” to get the city on board. I have heard the suggestion that this problem can get “fixed” in the next legislative session. Are you willing to “hope” that this gets fixed? Are you willing to take that risk with so much of your money on the table?
If Dunwoody signs the IGA it allows the city to be used as a pawn by the county in a game that has serious wasteful and taxation implications. Worst of all, if this goes forward to the ballot and passes, your property taxes will go through the roof. And, Dunwoody will have agreed to give them an extra year on that one, all in exchange for a few more of your dollars over 6 years.
Please let your Dunwoody councilmember hear you on this matter. We cannot encourage the county to move forward with such a risky and flawed proposal. We cannot support the removal of the assessment freeze. I hope that you will join me in my efforts to oppose this.
Double Taxation – the fallacy of pension legacy costs.
I am writing to alert you to a potential property tax increase coming from the Georgia General Assembly. House Bill 711, sponsored by Rep. Mary Margaret Oliver (D-Druid Hills), seeks to add a special tax district to cities formed after 2005. Rep. Oliver believes that newly formed cities owe, what she refers to as, “pension legacy costs”. The notion that these legacy costs exist is false and here’s why.
- Newly formed cities continue to pay fully into the General Fund and the Fire Fund. Embedded in these funds are the costs for benefits, including pensions for the employees providing these services.
- Newly formed cities continue to pay fully into the self-sustaining funds of Sanitation and Watershed. Embedded in these funds are the costs for benefits, including pensions for the employees providing these services.
- DeKalb County lowered the millage rate for the Police Fund (a fund newly formed cities do not pay into) in the 2015 budget.
- DeKalb County did not reform the pension benefit system until December 2015 – 7 years after the formation of Dunwoody.
- DeKalb County used unrealistic actuarial assumptions that negatively impacted funding.
If DeKalb County believed there was a crisis in the pension plan, chiefly driven by the new cities no longer paying into the police fund, why would the county lower the police fund millage rate in 2015? If the county believed that the crisis was caused by newly formed cities, why did pension reform not occur until just a few months ago in December of 2015?
House Bill 711 is only directed at newly formed cities. It is punitive, based on false assumptions, and is not congruent with the facts. Make no mistake about it, it is a discriminatory tax aimed at Brookhaven and Dunwoody. It is a bailout that would allow DeKalb County to continue poor fiscal management. It creates a liability for new residents and business for a service they never received. Imagine an entirely new property tax layered onto the commercial engine of the region – the Perimeter market – and the affect that would have on business, growth, and sales tax revenue to the county, schools, and state. House Bill 711 is wrong and would have dire economic consequences for the region and state if passed.
House Bill 711 is currently in the House Governmental Affairs Committee. Here is a list of emails for the members of that committee and the committee staff.
firstname.lastname@example.org (Policy Analyst)
email@example.com (Admin. Assistant)
Understanding DeKalb’s Millage rate system
First, DeKalb County’s millage rate isn’t one millage rate that funds all aspects of the county. DeKalb’s total millage rate is actually the sum of various component millage rates. I often refer to these individual rates as “buckets”. Here’s a list of some of the “buckets” for which you may pay a millage rate:
- General Fund – This funds services that are provided county-wide like the court system, sheriff, libraries, etc.. It is the largest fund and every resident in DeKalb, including all cities, pays the rate for this fund.
- Fire Fund – This funds the Fire Department that is used by the unincorporated parts of the county, as well as most of the cities, included Dunwoody, Brookhaven, Chamblee, Doraville, etc.
- Police Fund – This funds the DeKalb Police Department for unincorporated DeKalb and any city that elects to use this service.
- Roads and Drainage – This funds roads and drainage services to the county and any city that elects to use this county service.
- Parks and Recreation – This funds parks and recreation services to the county and any city that elects to use this county service.
- There are also debt service rates that are apportioned county-wide and otherwise pursuant to their issuance.
- House Bill 711 proposes to add a new “bucket” that would be filled only by cities formed after 2005.
Sanitation and watershed services are self-sustaining and charge a fee-for-service for unincorporated county residents as well as residents of cities. Newly formed cities have all continued using DeKalb as their sanitation service provider. Water is only provided by the county so all cities use, and pay, for this service.
Planning and Sustainability is a self-sustaining, fee-for-service fund that provides the plan review services to residents and builders who need permits. This area also handles business licensing services. Dunwoody and Brookhaven now provide this service as a city.
Since the incorporation of Dunwoody and Brookhaven, residents of these cities have continued to pay fully into the General Fund, the Fire Fund, the appropriate debt service, and they continue to pay into the self-sustaining funds of sanitation and watershed. So, the only services that these cities no longer receive, or pay for, from the county that are funded by property tax millage rates are: (1) Police, (2) Roads and drainage, and (3) Parks and Recreation.