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.