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.

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.

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.

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.

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 www.decaturgatax.com 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.

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 www.gabar.org, entering “Decatur” under Member Directory, and clicking Search. There are many fine attorneys in Decatur who are knowledgeable about the applicable statutes.

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.

How Decatur's fees appear on 1st and 2nd installment tax bills

One of the questions in our new FAQs deserves elaboration since it causes confusion every year and it's hard to explain without visuals:

If Decatur only bills for sanitation and stormwater during the 1st installment tax billing, why are these fees showing up on my 2nd installment bill? Aren’t you double-charging me? The short answer is no, because the 2nd installment bill is always a re-statement of the entire bill for the year, including all taxes, fees, and payments made over the course of the year.

As an illustration, let's assume that your base property tax charges are $1,000 for the 1st installment, plus $312 in fees (residential sanitation and stormwater), and another $1,000 in taxes for the 2nd installment, ie $1,000 + $312 + $1,000 = $2,312 in total city taxes and fees for the year.  Here's how that would appear on your bills:

The line-by-line amounts during the second installment all appear to be "doubled," at first glance, but those are actually the full year's charges (1st + 2nd installments), which are partly cancelled out by what was already paid during the 1st installment.  The sanitation and stormwater charges are re-printed on your 2nd installment bill so that you know what the total year’s charges and payments have been.

Another way of looking at it would be that if the fees were being charged twice a year, the total bill would have been $2,624 ($1000 + $312 + $1000 + 312) rather than $2,312.

Decatur's tax office answers frequently asked questions

 

We've prepared answers to the most frequently asked questions we hear in the Revenue Division.  This information is also posted on the City's website at www.decaturga.com/taxfaq.  Please take a look and let us know if we left something out!

 

How do I check property taxes? You can pull City tax records, print a bill or receipt, or make a tax payment with a 2.2% plus 30¢ third-party processing fee online at www.decaturgatax.com.

When are taxes due?
We bill in two, unequal installments per year. Payment is due on June 1 and December 20.

How do I know if a property is inside Decatur’s city limits or is located in unincorporated DeKalb County?
There are thousands of properties with Decatur mailing addresses that are actually located outside of Decatur’s city limits in unincorporated DeKalb County. Properties in unincorporated DeKalb County do not receive services from the City of Decatur and are not subject to city taxes. About 99 percent of residences in Decatur’s city limits have a ZIP code of 30030, and about 90 percent of properties in Decatur have 3-digit street numbers. If you have a ZIP code other than 30030, or a 4-digit street number, there’s a fair chance that you’re not actually in the city. You can look at a map here, or search for the property on the DeKalb County tax commissioner’s website to confirm whether you are within city limits. If the property is in tax district 4, it’s in unincorporated DeKalb County. Tax district 92 is Decatur.

How long should it take for my tax payment to post? That will depend partly on where your payment was mailed. In general, even for in-person payments, please allow 7-10 business days before your payment is applied to your account. We honor postmarks, so don’t worry about additional interest accruing if you mailed your payment in on time.

Where is my refund? If an overpayment is made on your property, we refund the entity that made the last payment that resulted in the credit. For example, if you paid, then your mortgage company paid, we would refund the mortgage company. Issuing refunds may take three to four weeks after your original check cleared the bank before we mail out your refund check.

How do I appeal my property value? Through the DeKalb County tax assessors office. All properties in Decatur are assessed by the county. The city has no assessor, appraiser, influence, expertise, or authority over assessments. We receive values from the county and are bound by those values for tax purposes.

I appealed my taxes with DeKalb. Now what? We bill you using an 85% temporary value. Your city tax payment remains due while your appeal is being processed by DeKalb. Upon the conclusion of your appeal, you may end up owing us the remaining 15%. In other words, you could end up owing money even after winning an appeal.

Do I have homestead exemption?
Look at the exemptions column of your tax bill. You have the basic homestead exemption if a figure of $20,000 in the exemptions column on three rows of your bill. If you have all zeroes in the exemptions column, you do not have the basic homestead exemption.

If you’re not sure what age-based homestead exemptions you have, please call 404-370-4100 or visit City Hall for help. More information about homestead exemptions in Decatur can be found here.

To apply for the basic homestead exemption online, click here.

Will the second installment property tax bill be the same amount as the first installment? No.

How much will my next tax bill be? For a first installment tax bill, we will have your tax bill calculated by April 1. For a 2nd installment, we’ll know by October 20. We cannot provide any official numbers earlier than that because your taxable value or the millage rates could change.

Can I pay the full year’s taxes up front? No. We do not know how much your second installment tax bill will be each year until October 20.

Why did my tax bill go up? Individual circumstances will vary. Generally speaking, 1st installment tax bills are higher than 2nd installments because we bill for sanitation and stormwater fees during 1st installments only. Our millage rates have been fairly consistent over the last few years, so any other dramatic changes in your bill are probably due to a change in your assessed value from DeKalb County. Please check with DeKalb if you don’t understand why your assessed value has increased. To see an example of how we calculate bills, visit our general information page.

If Decatur only bills for sanitation and stormwater during the 1st installment, why are these fees showing up on my 2nd installment bill? Aren’t you double-charging me? No. The 2nd installment bill is always a re-statement of the entire bill for the year, including all taxes, fees, and payments made over the course of the year. The sanitation and stormwater charges are re-printed on your 2nd installment bill so that you know what the total year’s charges and payments have been, but you’re only being charged for these fees once per year.

Why are taxes in Decatur higher than DeKalb? The City of Decatur is known for high-quality services to its residents. DeKalb County property taxes for residents within the City of Decatur are lower than City taxes because the City provides more services to residents than the county does. Also, about 60 percent of your tax bill goes toward the city school system.

What if I never got a bill and my taxes are past due? We mail paper bills to every property owner twice a year. If we get mail returned, we research it and re-mail your bill either to the property address or alternate addresses that we find. We acknowledge that unusual circumstances may cause you not to receive a bill, but failure to receive a bill does not relieve you of your obligation to pay. Taxes are always due on June 1 and Dec. 20. If you haven’t received your paper bill, you can access it online at www.decaturgatax.com. We also offer a grace period with each billing. If taxes remain unpaid after the grace period we add 10 percent penalty and 1 percent interest per month. Ultimately, it is your responsibility as a property owner to ensure your taxes are paid.

What if I received a business personal property tax bill, but I’ve closed my business or sold the property?
Taxes must be paid for the full year regardless of any change in the residency of the taxpayer or disposition of the property that occurred after Jan. 1. The taxes cannot be pro-rated or waived even if your business has closed midway through the year.

Do you accept memo bills? No. We no longer accept payments with summary bills or statements that are created in-house by law firms or banks. All payments made by check must include the remittance coupon provided with the paper bill (or e-bill from decaturgatax.com) to ensure timely and accurate posting of your payment. Checks must include the property ID and the tax year for which the payment is being made.

I provided a new mailing address to your office. Why isn’t it showing on your website?
Please allow a few days after you’ve notified us of changes in ownership or mailing addresses to be updated. Also, please be aware that our ownership and mailing information is overridden each time we receive updated data from DeKalb County. DeKalb County maintains the official legal records including property recording, deeds, and tax digests. If you don’t notify the county of your updated information, the county’s old information will eventually override the information you’ve given us.

Where do I mail my tax payment? City of Decatur
P.O. Box 945650
Atlanta, GA 30394-5650

What types of payment do you accept?
You can pay with a check by mail or in person, cash in person, or by credit card online.

If you are paying off a tax lien or replacing a bounced check, we accept only cash or cashier’s check.

Why am I charged a processing fee to pay by credit card? The City uses a third party payment processor for credit card payments. This fee is charged by the processor. You can pay by check or cash with no extra charge.

What is the penalty if I pay late? A 10 percent penalty and 1 percent interest monthly are applied to any unpaid balances. Additional collection fees will apply if your account remains delinquent.

Who do I contact about my tax assessment, my appeal, my water bill, my landlord, my marriage license, or the public defender’s office?
DeKalb County at 404-371-2000.