So throw this recent development at the Georgia Capitol today onto the discussion pile as we begin debating the merits of a Decatur tax increase to build more school infrastructure.
The AJC reports that the Georgia House of Representatives passed a bill this morning that will increase the sales tax in DeKalb County to 8%, matching Fulton County’s current rate. The tax would raise about $100 million a year for capital improvements around the County.
But that’s not all — the legislation would also use the EXISTING 1 penny sales tax to reduce county residents’ property taxes.
How much money are we talking here? Well, luckily Rep. Mike Jacobs used Decatur in his hypothetical example…
For example, property taxes would decrease by $625 on a $300,000 home in Decatur, Jacobs said. On a $500,000 Decatur home, property taxes would drop $1,065.
So, it seems like if this bill were to pass, it would more than offset the increase Decatur residents would see if they approved a $82 million GO Bond for the school system. Tax increase estimates for the GO Bond have been estimated in the range of $667 – $864 on a $500,000 home, depending on the amortization period.
The bill now advances to the Georgia Senate for consideration.
Photo: Georgia Capitol by Connor.carey at via Wikimedia Commons
But how much more $ would we pay in sales tax? I know it depends on individual consumption, I wonder if they are trying to make this proposal revenue “neutral”?
Well, you’d have to be spending 60k a year on taxable goods to approach the amount of property tax offset on a 300k house.
The increase would be a penny. Do your own math.
Or perhaps this would erase any potential tax increases residents would feel if DeKalb actually corrected assessments.
“Or perhaps this would erase any potential tax increases residents would feel if DeKalb actually corrected assessments.”
Not sure I follow since assessments are likely to increase in most cases.
We are all (or many of us) looking at two possible tax increases,
1.) if/when DeKalb corrects assessments
2.) if/when the school tax bond passes
I guess I am saying I doubt my taxes will net zero with this bill.
“if/when DeKalb corrects assessments”
That isn’t a tax increase. It may mean you are personally paying more in taxes, but it still isn’t a “tax increase”. That is you paying FMV on your home if you aren’t currently.
Not sayin’ I would be happy about it either, but a tax increase it ain’t.
Yep, poor choice of words. My intent was to state “I would be paying more,” but boy how I appreciate the constant corrections that occur on DM.
With the sales tax increase our taxes would still see an overall increase, albeit a small one, based on the estimates for the GO bond. Don’t know how typical our spending is though.
You also have to figure in other actions of the State Legislature this term that are basically passing along more cost to the counties and schools by mandating certain coverage/services, but providing that the counties and school districts will have to pay- which means no state income tax raise for those services, but a likely hike in county and school taxes. I’m thinking of the health benefit coverage for bus drivers and other classified employees of schools as one example- unless that legislation changed recently.
This was the quid pro quo that Fran Millar required before he would allow the “Clean Up DeKalb” bills from the OTF & Blueprint task forces to proceed for a vote.
If the bond referendum passes for the city, then that means more taxes. If the sales tax is increased to 8%, that means more taxes. Dekalb already charges a penny host tax. More taxes are more taxes. The counties and municipalities will get more from the tax payers. They can increase assessments on real estate fair market values too. Enough is enough.
His example of $300,000 Decatur home and $625 decrease on county taxes cannot be correct. My appraisal is a few thousand under that and my county taxes are less than his example. Cannot possibly wipe out all of my county property taxes. Ate you sure the example is for a home inside the city limits?
Good point. I didn’t even catch that we’re only talking about county taxes here. Those numbers can’t be right. Could he possibly be talking about the assessed value for tax purposes, meaning those numbers he used would only be 40% of the market value?
As Sharron has pointed out, it’s not possible the level of reductions Rep. Jacobs mentioned could apply to those paying city school taxes instead of county taxes. Moreover, the way I understand it, cities, including Decatur, would receive less money under this proposal, because currently a portion of the 1 cent goes to cities and the rest to property tax reduction. All of it would go to property tax reduction under the new law, which might be fairer to the county as a whole, but won’t be much benefit to those in Decatur not residing in $800k+ homes.
Sure it could. The sales tax collected by the county could by paid to the city to offset property taxes. So, the reduction would be in your city tax bill, not your county’s as speculated by Sharron.
The specific details are lacking at this point, but I think it is premature to label it as impossible.
That would be nice if it works out as you describe. Reading the links above explains how HOST monies will be distributed differently from most to all going to homeowners.
You may recall that the last HOST was supposed to be passed through the the cities, but the county wouldn’t do it and a 10 year court battle ensued, ultimately lost by the county.
This sounds incredibly regressive. Basically poor folk (who spend a higher relative proportion of their money on purchases) will be paying for an offset for rich homeowners (who pay a higher relative proportion on property tax).
I don’t know the details but I’m surprised DeKalb county is going along with it.
I have no problem with the sharing of county costs with everyone in the county rather than just the home owners. But I do feel in the long run, this is just a tax increase.
Renters pay rent to people who pay the property taxes — but who may not even live in the county. The cost is built into their rent, so they do share the tax burden. This action means the property owners will pay less, rent will not decrease, and renters will pay more of their earnings in taxes. It shifts the tax burden more to those who spend more of their income locally on taxable items.
I do see that the change in allocation will require voter approval, and it’s conjoined with approval of the penny increase.
“This sounds incredibly regressive.”
But isn’t the one penny already being collected for purposes of lowering property taxes? If a portion large enough to account for the numbers Rep. Jacob’s cites is currently going to city governments, then that might explain why DeKalb is supporting it. In other words, more of the sales tax collected would go to unincorporated DeKalb residents instead of a portion going to cities.
The ADDITIONAL one penny won’t be going to offset property taxes, but to capital improvements. Now I suppose you could argue that revenue should be derived from property tax increases instead of a regressive sales tax, but that’s likely a non-starter politically.
But it’s not just keeping property taxes the same, it’s reducing them. Replacing property tax revenue with sales tax revenue is about as regressive as they can be.
“But it’s not just keeping property taxes the same, it’s reducing them. Replacing property tax revenue with sales tax revenue is about as regressive as they can be.”
I’m not clear on the details, but, technically, isn’t the bill reducing property tax by eliminating the allocation to city governments, rather than “replacing” property tax revenue with a sales tax? Again, I’m not arguing that the additional penny isn’t a regressive tax increase, but it’s the change in how the existing penny is allocated that would allow for property tax decreases. I assume you would prefer they don’t increase the sales tax and pay for capital improvements some other way, which I get. But then they would have a hard time spinning a tax increase as a tax cut.
Is this to encourage people to own and liven houses? Is it suppose to reduce the amount of renters living in Dekalb County? Does the taxes that get paid to County earn interest so much that is great to give a discount to Home Owners? What are the Capital Improvements needed to be done for Dekalb County?
The bill seems to indicated it is about improvement of the water and sewer System in the County.
It appears that Lumber and building material is except from being taxed.
It appears that the Airport in the County is except from being taxed.
If I am reading it wrong could someone read through it again?
http://www.legis.ga.gov/Legislation/en-US/display/20152016/HB/215