The AJC posted a blurb Friday afternoon that noted that due to a 19% increase in the city’s tax digest this year, Decatur Schools would likely drop the millage rate by a full point next year.
Using this calculation, it looks like a full point millage drop would result in roughly a $240/year savings for a Decatur home valued at $500,000.
Additionally, on the agenda for tonight’s City Commission meeting, Asst. City Manager Andrea Arnold is recommending that the city drop its total millage rate by a point due to a sizable 20% increase in the digest. Ms. Arnold states that 15% of the increase is due to re-evaluations by the county and that 5% is due to new construction.
Ms. Arnold estimates the savings at $240/year for a $500,000 Decatur property.
So ultimately, the millage would lower Decatur taxes by roughly $500/year for a $500,000 property.
All of this millage news obviously comes in front of the backdrop that CSD has requested that the City Commission put a $75 million bond in front of Decatur voters this November. That bond has been estimated to raise taxes on a $500,000 property by $680/year.
Ms. Arnold states that the city will hold the state mandated public hearings surrounding the big millage decrease, in addition to another community budget gathering in the coming weeks.
What’s not clear from this post is if the city is proposing the full revenue neutral roll back which would allow them only to capture the value of new construction, not revaluations. Otherwise state law is they’d have to advertise a property tax increase.
And finally, even if they do the full rollback, that doesn’t mean folks won’t see increases. What they are saying is the average $500,000 house was a roughly $425,000 house before it was revalued. Houses that went up more than the average will see significant increases.
Now, people who weren’t revalued and didn’t add on, would see a flat roll back because their base value did not change.
“Ms. Arnold states that the city will hold the state mandated public hearings surrounding the big millage decrease, in addition to another community budget gathering in the coming weeks.”
That’s pretty clear to me.
I’d imagine there is still lots of “free” money on the table if more houses were assessed accurately.
So, they are going to cut the rate by only 8% (if the cut goes from 13 mil to 12) despite a 19% digest increase.
The city will still take in 10% additional revenue! Increasing your budget 10% year over year IS a tax increase and is not financial discipline.
A 2 mil cut would be close to revenue neutral, anything less than a 2 mil cut is still a tax increase.
They actually have to advertise it as a tax increase for that very reason.
“In 1999, the Georgia General Assembly enacted what is commonly referred to as the ‘Truth in Taxation’ legislation,” Arnold wrote. “The purpose of the legislation is to require local governments to either rollback the millage rate equal to the total value of reassessments on real property; or, to provide advertisements, notice and public hearings if the local government intends to adopt a millage rate in excess of the “rollback” rate. Attached is a copy of the computation showing that the combined millage rollback rate for 2015 would be 11.42 mills, or 0.58 mills lower than the proposed millage rate of 12 mills. This results in the requirement to advertise a 5.08 percent tax increase”
They have been playing this game for years. The politicians announce that “the millage rate is being lowered”, but the amount of money coming in increases every year due to the expanding digest.
So why not just hold the rate and apply any excess to solve the school funding issue?
Is this too logical?
That may be the practical effect of what happens if the digest goes up so much that a lower millage produces the same amount of revenue- however, since we would be getting the money up-front with the bond (which you would need for a construction project — no one wants to fund a construction project year by year), the bond would still need to be passed.
Rob,
I had the same thought when I read this as well. But then it occurred to me that the school expansion is largely due to new residents we anticipate moving into the city. Why not give ourselves a tax break until more new folks with kids move in and we can all pay for the expansion together?
“the school expansion is largely due to new residents we anticipate moving into the city.”
Incorrect.
The school expansion is due to the kids that are already here. The enrollment is already the highest it’s ever been. Current graduating classes have about 200 kids. Current elementary classes have about 400 kids. As those additional 200 kids (per grade!) move through the system they will need seats in classrooms, cafeterias, etc. The expansion is meant to serve the kids that are already here.
My point exactly.
A rate cut is not the same as a tax decrease. And, in fact, it can often be a tax increase.
You should never let them get away with saying it’s a tax cut when in fact a rate cut with a value increase often means higher taxes and more revenues. That’s what the so-called “Taxpayer Bill of Rights” passed by
the legislature was all about.
That law requires them to calculate the revenue neutral number and if they vary from it to take in $$ from revaluation, then they must call it a tax hike – which it is. And, even when it stays neutral, some folks who saw their value increase at a higher rate than the tax hike will also see an individual tax hike, while owners who stayed the same or increased less would drop.
And, finally, this all goes back to a system that taxes presumed value, not necessarily true value unless you sell and take the gain. Many folks found in 2008 that gains perceived by the tax system were not real when the market shifted down.