Wednesday, August 13, 2014

Officials square off over property tax increase

In 2013, the governor signed House Bill 604 into law, which prohibited the Fulton County board of commissioners from approving a property tax increase until 2015 at the earliest. The law says, “Any proceedings by the governing authority of Fulton County to make or fix a levy of ad valorem taxes for Fulton County at a millage rate which would exceed the roll-back rate shall be suspended until January 1, 2015.”

The Fulton County commission then voted to repeal the state law on the basis of their home rule authority under the state constitution, which says, “a county may, as an incident of its home rule power, amend or repeal the local acts applicable to its governing authority” (Sec. II, Par. 1) under certain conditions.

Last week, the county commission approved a 17 percent millage rate increase.

Former co-sponsors of House Bill 604 immediately sued Fulton County and are seeking an injunction to prevent the county tax commissioner from collecting taxes with the higher rate.  Lawyers for the lawmakers say that the home rule power cited by Fulton County is trumped by a 1951 amendment to the state constitution that specifically authorized the General Assembly to control Fulton County’s ad valorem taxation powers.

The tax increase has revived interest among some north Fulton County taxpayers to secede to create their own “Milton County.”

Tuesday, August 12, 2014

Lake Lanier homeowners seek property tax cap

Hall County property owners are asking state legislators to place a cap on the amount that property assessments can increase per year. If they drum up enough support, their proposal could change how assessments are handled statewide.  Access North Georgia reports:

Hall Co. group pushes for law to cap property taxes

GAINESVILLE - Owners of lake property in Hall County say they will not give up when it comes to placing a limit on how much they are charged each year for property taxes.

A group called "Georgia Tax Cap" has been gathering signatures on a online petition to present to lawmakers with the goal of having a new state law that would limit the amount property taxes could increase in a given year.

Group spokeswoman Berly West Baker said the effort was prompted by Hall County's reassessment of lake properties this year.

On average, property owners in the county saw an increase of about 39% in assessed value, but Baker said the bulk of those who faced increases were lake property owners. Plus, she contends most of the increases were much higher than the average - some as much as 300% higher…

But apparently, responses from North Georgia legislators are mixed. Caps have been controversial ever since California’s Proposition 13 which limited assessment increases to 2 percent annually. Lake property owners might have more luck contacting members of a state study committee created during the 2014 legislative session to evaluate property taxes and education funding, or by proposing a separate property tax cap study committee in 2015.

Wednesday, August 6, 2014

No properties sold at Decatur’s tax sale

Decatur conducted a tax sale yesterday for delinquent property taxes owed for 2013 and prior tax years. By the time of sale at 10:00 a.m., the only properties left were seven land lots of various size, quality, and accessibility. No buildings or homes—either occupied or vacant—were put up for auction. The number of delinquent properties by the time of our sale was consistent with the number auctioned over the past couple years.

Four potential bidders attended the sale at City Hall, but made no bids, meaning that the taxes for these lots are still owed and there will be no change of ownership at this time. Generally, buyers don’t want tiny land lots that cannot be easily built on (although neighboring property owners are sometimes interested). The minimum required bid is the amount required to pay off the back taxes and collection fees owed. If there had been any bids, the buyer would have had to pay the taxes, then we would have filed a tax deed on their behalf, and the original owner would have had a year to redeem the property from the tax sale buyer.

Contrary to popular belief, the seven properties do not automatically transfer to ownership by the City now. The properties remain on the tax rolls under the existing owners’ names, and the parcels can be included again in future county or city tax sales.

Though unpleasant, the deadline of a scheduled tax sale is the only thing that will ensure payment by certain property owners, so the tax sale is a crucial component in maintaining Decatur’s 99.9 percent real property tax collection rate.

Monday, August 4, 2014

Decatur adopts new millage rate for school system

Decatur’s school board voted to lower the school’s millage rate from 20.9 in 2013 to 20.5 in 2014 last month—a reduction of almost 2 percent. Tonight, the City Commission has formally approved the new rate. (The Commission is required by the City's charter to adopt the school board’s proposal).

Together with Decatur’s own 13 mill levy, the approval makes for a combined millage rate of 33.5 for 2014. The combined rate had been steady at 33.9 mills since 2011.

A mill represents one tax dollar per $1,000 of assessed property value, so a four-tenths reduction in the millage rate represents a 40¢ tax reduction per $1,000 of assessed value. In practical terms, this means homes in Decatur would see a reduction of their total property taxes for 2014 of $35 to $80 compared to 2013 if the property value didn't change since last year. Individual tax changes will vary based on assessed value. This chart shows a few examples (assuming the property value is the same in 2014 as it was in 2013):

Example 1 Example 2 Example 3
100% property appraisal $175,000 $320,000 $400,000
50% property assessment $87,500 $160,000 $200,000
2014 city property tax bill $2,931 $5,360 $6,700
2013 city property tax bill $2,966 $5,424 $6,780
Year-over-year reduction of… $35 $64 $80

Homeowners who are over the age of 80 and who make less than $40,000 will not see a change in their bills since they are not currently paying school taxes. Certain individuals over the age of 62 who have low incomes and low assessed values may also be paying little or no school taxes, and will likewise see little or no change in their bills.

In addition to real property, the millage rates also apply to "personal property," which are business inventory taxes, so some local businesses that have no change in their property value will see a slight savings.

The new millage rates will be factored into Decatur’s second installment property tax bills, which will be mailed Oct. 20 and due Dec. 22. Payments made during the first installment this spring are treated as credits against the total year’s taxes.

Thursday, July 31, 2014

Stephens County assessor explains "burden shift"

The chief appraiser in a northeast Georgia county recently addressed the concept of "burden shift" brought about by homestead exemptions during a public meeting.  According to the Independent Mail, Christen Collier told Stephens County commissioners:
...Stephens County’s senior homestead exemption, approved by county voters, provides more of a break than the same exemption in other counties because of what Stephens voters approved.

“You have a senior homestead exemption in Banks County, you are going to save $450 off your tax bill,” Collier said. “In Franklin County, you are going to save $250 off your tax bill. In Stephens County, 65 years and over, you are going to save $1,040. That does not go away. It is called burden shift. It is shifting the burden.”

Collier said that burden shift falls onto those who do not have the same exemptions because the county has no other way to replace that revenue.

He used an example of a $100 meal to demonstrate that. If split equally, 10 people pay $10 each for that $100 meal. But with exemptions, some pay more than $10 and some pay less, Collier said. “Three people are going to be exempted from paying the meal,” Collier said. “Two people are going to get a 50 percent reduction, so those two people are going to pay $5. Three people are going to get a 25 percent reduction. They pay $7.50 each.”

That means, he said, the last $75 total must be split among three people which means three people pay $25 for the $10 meal, while three people pay nothing.

Collier said he is not against tax exemptions but wanted to point out their effects on property taxes.

It does sound like younger residents in Stephens County may be paying a larger share of their county's property taxes than their age peers in neighboring counties.  In theory, all local governments determine what services they are going to provide in the coming year, and then the adopt a millage rate necessary to raise the funds to cover the costs of the services.  Knowing what homestead exemptions their residents have, the governing authority would have to increase the overall millage beyond what it would have been were there no homestead exemptions.

However, I think local governments tend to make decisions about the millage rate based on a combination of what is expected politically and by what is financially feasible.  They don't necessarily apply rote, mathematical logic to the millage rate or automatically increase it each time homestead exemptions expand.  Some governments may be willing to "take a loss" by offering more exemptions, and some take a more agressive attitude by restricting exemptions as much as possible.  Also, a local government may be able to keep a millage rate steady even while offering more homestead exemptions if it identifies equivalent savings in the budget.

But Collier's basic point is sound.  Most homestead exemptions in Decatur were the result of approval by voters in a referendum, so voters should have the full picture in mind when deciding whether or not to add more exemptions.  This community has stated its commitment to helping seniors live affordably in their homes, so the possibility of burden creep isn't the only consideration here.

Tuesday, July 29, 2014

Brookhaven’s tax savings fact checked

Politifact rates Brookhaven’s claim that city residents there pay less property taxes than equivalently valued properties in unincorporated DeKalb as “half true.”

Brookhaven sent this mailer to taxpayers stating that owning a home in Brookhaven saves residents several hundred dollars a year in property taxes compared to owning a home in unincorporated DeKalb:

But Politifact found that Brookhaven didn’t take debt and stormwater charges into account, and that the city computed its examples with a dated estimate for the homestead option sales tax credit. Politifact says the corrected figures would actually reduce the relative savings to less than $100 a year for most homes.

I’ve been trying to convey accurate information to property taxpayers for several years, including contrasts between city and county taxes, often using visuals like Brookhaven did. In that time I’ve learned that it can be very tricky to make apples-to-apples comparisons between incorporated and unincorporated tax bills. I don’t get DeKalb’s digest from DeKalb—I get Decatur’s digest from DeKalb--so it’s challenging to pull properties from DeKalb’s website with the exact same value, equivalent exemptions, and identical attributes for determining fee assessments to draw comparisons with equivalent city parcels. DeKalb has shared a property tax calculator spreadsheet with us, and we have our own calculators as well, but that doesn’t always solve every question about potential tax liability.

Politifact’s headline says Brookhaven’s claims are “exaggerated.” Apparently so, but based on my experience, this looks like an honest mistake.

Friday, July 25, 2014

Changes to credit cards and acceptance methods on the horizon

Your credit cards will be changing soon to incorporate newer, fraud prevention features. EMV, or "chip and PIN" cards will begin replacing the magnetic stripe cards that American consumers use. Over time, this may begin to affect how payments are accepted at City facilities.  Here's a heads up from Fox Business:
The nationwide shift to EMV has begun.

EMV -- which stands for Europay, MasterCard and Visa -- is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.

In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are migrating to this new technology to protect consumers and reduce the costs of fraud.

"These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards," says Julie Conroy, research director for retail banking at Aite Group, a financial industry research company. "It's an important step forward."

For merchants and financial institutions, the switch to EMV means adding new in-store technology and internal processing systems, and complying with new liability rules. For consumers, it means activating new cards and learning new payment processes.

Most of all, it means greater protection against fraud. The EMV "ship has sailed" in the U.S., according to Martin Ferenczi, president of Oberthur Technologies, the leading global EMV product and service provider. Consumers will receive their first chip-card soon, if they have not already.

"I predict that by the end of this year, every household will have at least one card with a chip," he says.

Thursday, July 24, 2014

Filing requirements relaxed for businesses

In recent years, businesses renewing their business licenses in Georgia have been required to submit two affidavits with their renewal: 1) A SAVE affidavit affirming that the renewal applicant has legal status to work in the U.S., and 2) an E-Verify affidavit indicating whether or not the business is required to participate in the federal E-Verify program based on that business’s number of employees.

State Senate Bill 160 relaxed that standard. Now, as long as the business renewal applicant is a U.S. citizen who has already filed a valid SAVE affidavit previously, that applicant is not required to re-file a SAVE affidavit with their renewal. Legal permanent residents and qualified aliens will continue to be required to submit a SAVE affidavit with their renewal. Businesses that do not comply with this requirement will not receive a business license.

 Businesses with less than 10 employees that have already filed an E-Verify affidavit are no longer required to submit an E-Verify affidavit with their renewal either. Businesses with 10 or more employees are required to provide their E-Verify number annually with their renewal. Businesses that do not comply with this requirement will be reported to the State.

 New business applicants need to complete both affidavits.

When we send renewal notices to local businesses this fall, we plan to send invoices along with blank affidavits if our records show that your business still needs to file one or both affidavits. If our records indicate that you are exempt from filing based on the criteria above, we’ll just send you an invoice. If your business has experienced a change in ownership or has grown beyond 10 employees within the past year, please call us at 404-370-4100 as those changes will affect your filing requirements.

Wednesday, July 23, 2014

Funds for e-check/e-billing approved in FY14-15 budget

As part of the budget approved by the City Commission for FY14-15, the Revenue Division has been authorized to offer electronic check and electronic billing options for property taxes.

Decatur began displaying property tax information online and accepting online payments by credit card at in 2010. We are in preliminary conversations with our current online bill presentment vendor to expand features on that website. In addition to the current options of Mastercard, Visa, Discover, American Express, and Paypal, we would also be able to accept payments by e-check. The website would also provide a new e-billing option to "go paperless," by opting out of paper billings. Property owners who sign up for the service would receive an email when their bill is ready.

We hope to have these features in place during the 2nd installment 2014 property tax billing or 1st installment of 2015.

Tuesday, July 22, 2014

Open letter to prospective tax sale bidders

Decatur’s annual tax sale is scheduled for August 5 at 10:00. As part of our delinquent collections processes, we are able to provide a list of properties scheduled for tax sale and balances owed upon request to interested parties.

However, we are unable to advise you on the quality or characteristics of the properties for sale, or potential financial or legal issues that may arise as a consequence of you bidding, purchasing, or losing a property at one of our annual tax sales. Tax sales conducted by the City of Decatur are “buyer beware” events.

Redemption procedures are governed by state law as follows:
§ 48-4-40.  Persons entitled to redeem land sold under tax execution; payment; time
Whenever any real property is sold under or by virtue of an execution issued for the collection of state, county, municipal, or school taxes or for special assessments, the defendant in fi. fa. or any person having any right, title, or interest in or lien upon such property may redeem the property from the sale by the payment of the redemption price or the amount required for redemption, as fixed and provided in Code Section 48-4-42: (1) At any time within 12 months from the date of the sale; and (2) At any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in Code Section 48-4-45…
§ 48-4-42.  Amount payable for redemption
The amount required to be paid for redemption of property from any sale for taxes as provided in this chapter, or the redemption price, shall with respect to any sale made after July 1, 2002, be the amount paid for the property at the tax sale, as shown by the recitals in the tax deed, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments on the property, plus a premium of 20 percent of the amount for the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year thereafter. If redemption is not made until more than 30 days after the notice provided for in Code Section 48-4-45 has been given, there shall be added to the redemption price the sheriff's cost in connection with serving the notice and the cost of publication of the notice, if any. All of the amounts required to be paid by this Code section shall be paid in lawful money of the United States to the purchaser at the tax sale or to the purchaser's successors.
If you have further questions about redemption or any other aspect of the tax sale process, I strongly encourage you to consult with an attorney experienced in such matters. You can access a list of local attorneys by going to, entering “Decatur” under Member Directory, and clicking Search. There are many fine attorneys in Decatur who are knowledgeable about the applicable statutes.

Monday, July 21, 2014

A look behind the scenes in the lead up to a tax sale

The trend in Decatur over the last several years has been that about 95 to 97 percent of real property taxes are paid by the end of the 2nd installment grace period in early January. We collect the remaining 3 to 5 percent owed between then and early August.

Several steps occur between January and August to collect on the taxes that are owed for the prior tax year. Shortly after the grace period ends, my office sends out what we call “courtesy notices” to property owners with past due accounts. It’s considered a “courtesy” because sending these notices is not required by law. Of the 3 to 5 percent that is owed, about one-third of past due taxes are paid on the basis of these courtesy notices.

Around February we send an “Intent to FiFa,” to the property owner, which means that we intend to set a lien in 30 days if the taxes have not been paid by then. About another one-third of the past due accounts get paid after these “Intents” have been sent.

When we actually do set the liens and file them with the DeKalb County clerk of superior court, we send levy notices to the property owners. We call that “Stage One,” and accounts begin accumulating execution fees beyond the normal penalties and interest owed.

Later on in the spring, our delinquent collections partner, Government Tax Solutions, begins conducting title work on delinquent parcels. They determine who may have a security interest in the property apart from the owner, such as a mortgage company. Typically in June, “Stage Two” notices are sent to the property owners again and to those creditors.

In July, we advertise the remaining delinquent properties in the Champion as required by law. We also put up signs on the actual properties themselves. A final 10-day notice goes out to the property owner.

On the first Tuesday in August, we have a “tax sale.” We do this in City Hall—not on the courthouse steps like DeKalb County does. By this point, we normally have about 10 or fewer properties remaining, which are generally vacant properties and small tracts of land. The tax sale is an auction-style event at which the minimum bid to acquire a property is the amount of back taxes owed. The winning bidder has to pay off the back taxes in full with certified funds (cash or cashier’s check) by noon that day. The original owner of the property has a year to redeem the property (to buy it back) with a premium.

The time period between Stage One through the day of the tax sale itself is when Decatur’s Revenue Division collects the remaining one-third of the 3 to 5 percent of taxes that weren’t paid by the original deadline, bringing us up to a 99.9 percent collection rate on real estate property taxes for the prior year.

This year, we’re seeing the same basic pattern in delinquent volumes and the timing of payments that we saw in 2013 and 2012. This year’s tax sale is scheduled for Aug. 5 at 10:00 a.m.