State rep seeks to separate taxes from fees

Rep. Brett Harrell (R-Snellville) has introduced a bill in the state House that would require Georgia cities and counties to remove any nontax fees from property tax bills. Such fees would have to be billed separately, or on two separate sheets within the same envelope.

In addition to concerns that have been raised about local implementation costs and the adverse impact this would have on collecting fees, this would also mean that most Decatur residents would probably receive five local government bills annually:  three city bills (two installments of city property tax bills and a city fee bill) and two county bills (a county tax bill and a county fee bill).

This would almost certainly require us to create separate resident accounts to track your fees separately from your taxes, which means residents would have two city account IDs (your property or parcel ID plus a fee ID).  I'm not sure if DeKalb's system would work the same way, but if they do, that would mean that most residents would have four local government tax and fee accounts to keep up with.

This proposal is somewhat different from Rep. Harrell’s House Bill 291 last year, which would have required partial payments to be applied to taxes prior to being applied to nontax fees. That bill died in the House in 2011.

The Patch has this report:

Should Non-Tax Fees Be Removed From Property Tax Bills?

House Bill 159 would limit what type of fees municipalities could add to residents' property tax bills.

A bill introduced in the Georgia General Assembly last week by state Rep. Brett Harrell would prohibit municipalities from adding non-tax fees to property tax bills. Harrell initially introduced the bill in 2011 with nearly 60 co-signers.

“Too often citizens across Georgia experience increased property tax bills, higher monthly mortgage payments, and, in some cases, liens against their property, all resulting from the addition of non-tax fees added to their property tax bills,” Harrell said. “The type and number of fees continues to increase each year.  This legislation will help ease the burden on Georgia households and increase government transparency.”

Harrell said House Bill 159 addresses a growing concern among property owners statewide as home prices remain low. He said Georgians have to carefully budget their money and it doesn't help to have to face increasing property tax bills.

The municipalities, however, argue that fees are bills that have to be paid -- such as for the sanitation services in Gwinnett that caused so much controversy when first introduced. Robert Mesteller, a Snellville resident, took on the county on this issue last year, claiming it was illegal and unconstitutional to collect fees for sanitation services on property tax bills. His lawsuit was not successful, but is currently under appeal and awaiting a ruling from the Georgia Supreme Court. Gwinnett County officials cautioned that a change in the system could actually end up costing some taxpayers more in the long run.

When Mesteller filed his appeal, Gwinnett County communications director Joe Sorenson said a new billing system would have to be created if sanitation services could no longer be collected on property tax bills -- and that it would be costly.
In addition, the payment rate was about 99 percent for property taxes and significantly lower for other services. He said the higher rate of non-payment would be a liability for the other paying customers.

"The higher the rate of non-payment, the greater the burden on those who pay,” Sorenson said at the time, adding it was unfortunate but those who pay their bills faithfully would wind up paying for those who do not.

But there are other problems associated with collecting non-tax fees this way, Harrell says.
"Though millage rates and property value assessments may not change, non-tax fees for local expenses like street lights, speed bumps, storm water, and sanitation can add hundreds of dollars to a property tax bill. In fact, it is not uncommon for as much as 15-20 percent of a total property tax bill to originate from non-tax fees," Harrell said…

I am not sure where the data came from to support Rep. Harrell’s statement that “it is not uncommon for as much as 15-20 percent of a total property tax bill to originate from non-tax fees.”  In Decatur in 2012, residential sanitation and stormwater fees made up 5.5 percent of the total real property billing.  Residential sanitation fees pay for trash pickup and revenue from stormwater fees are used to make storm drainage improvements.

House Bill 159 itself is extremely short.  If passed, it would amend the Revenue Code as follows:

No property tax bill issued by the tax commissioner or other local fiscal authority for 13 the collection and payment of ad valorem taxes on tangible property shall include any nontax related fees or assessments, such as, including but not limited to, stormwater service fees or solid waste service fees. Any collection and payment of such nontax related fees and assessments shall be addressed in separate billings from property tax bills; provided, however, that this shall not preclude a tax commissioner or other local fiscal authority from including multiple billings in the same mailing.