I actually asked Decatur City Manager Peggy Merriss this question around this time last year after the last go-round with wacky DeKalb County tax assessments.  She confirmed to me last week that her explanation is still up-to-date.

The short answer is “Yes”.

The long answer…well, it’s a bit complicated so I’ll let her explain the process for herself…

In terms of the tax assessment issue, there were actually several things going on at the time the decision was made to use DeKalb County. One, the City was performing what is considered a county function in Georgia (tax assessment) under special local legislation that as I understand it, only applied to the City of Decatur and it was set to expire. Second, the cost of keeping the tax assessment function was increasing and we were going to have to invest money into systems, people and training in order to keep up to date. Third, there was a vocal group of commercial property owners who felt that their properties were overvalued and wanted the City out of the business. Lastly, it is also my understanding that a number of City Commissioners at the time did not feel comfortable serving as the Board of Assessment Appeals. However, I was not the City Manager at the time so I may not know everything that was happening.

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Yikes…

DeKalb County may have to raise property taxes higher than expected after new calculations revealed Tuesday show property values have plunged even more than anticipated.

The 13-percent drop in property values translates into an estimated $40 million shortfall in the 2011 budget –- and what some county commissioners say could lead to a 4-mil tax hike this summer. The drop in the county’s assessed value, down to $20.8 billion, had been projected last week to be about 10.5 percent.

But commissioners, who have the final say on the budget, say they won’t approve any tax increase unless the CEO Burrell Ellis offers up more cuts.

My casual calculations, based on the formulas in this Decatur Tax Blog post, seem to show that a 4 mill increase on a $275,000 house would result in an annual property tax increase of around $400.  Throw in the roughly $120 DECREASE Decatur residents will soon see on their DeKalb taxes due to the elimination of long-running “double-taxation”, and it’s possible that the $1,600 tax difference between the two municipalities on a $275,000 home could be reduced to at least a $1,200 difference (if you assume the DeKalb mill increase wipes out the “no-more-double-taxation” drop for Decatur residents).

Decatur’s taxes may still be higher, but they certainly seem a bit more sustainable than those in DeKalb.  How much more expensive must DeKalb get before annexation requests come flooding in?

Our Mayor continues to fight the asinine 3% increase cap on property assessments proposed at the State Capitol.

This initiative was proposed earlier this year as a “solution” to local governments that were raising property assessments in place of the more obvious action of raising the tax rate.  As I said back in March, this may be an issue in some GA towns and cities, but when the heck did the “conservative” party become the ones that applied blanket rules across the entire state??  What happened to faith in local governments?!  If a community has a problem with indefensible increases in property assessments, go vote those city hall bums out of office!

But don’t create a 3% cap that rewards those communities that are just too damn lazy to be watchdogs of their government officials and hurts responsible communities like Decatur!  When the city kept the millage rate at the same level this past year, no one claimed that they were doing us this great favor.  The city straight up admitted that the increase in property values was the reason.  Does that sound like a community hiding behind some shady “backdoor tax hikes”?

Unfortunately, regardless of all my ranting, it sounds like the mayors that protested this bill expect it to pass for residential properties.  And that means one more area where the city’s hands tied when it tries to collect revenue to support all of our great city services, first and foremost the school system.

Pretty soon, annexation is going to be the only option left.