The breakdown of a tax dollar for LaVista Hills properties

The City of Decatur often provides residents with information about how the average tax dollar is allocated (ie, how much goes to the schools versus government operations). I thought it might be helpful to provide prospective residents of LaVista Hills with a rough estimate along the same lines if their cityhood initiative is approved in the Nov. 3 referendum.

Currently, the combined county millage rate for unincorporated property owners in DeKalb is 44.54 mills. Of that total, 47 percent of tax dollars for non-homesteaded property goes to DeKalb County, and 53 percent goes toward DeKalb schools. The breakdown would vary for properties with homestead exemptions.

If cityhood is approved, homeowners in LaVista Hills would continue receiving property tax bills from the DeKalb County tax commissioner, but the allocation would change. Instead of reflecting taxes based on millage rates for unincorporated DeKalb, the homeowners would receive bills based on adjusted millage rates for county services and a separate millage rate for LaVista Hills. The tax bills would continue including county charges for general operations, hospitals (Grady), county bonds, fire service, debt service for unincorporated bonds that predate cityhood, and for DeKalb County schools.

If cityhood had already been in effect for 2015, we could assume an adjusted current year combined county-school-city millage rate of 43.4 mills. This would be based on the combined 44.54 mills minus 4.69 mills for county police service which LaVista Hills would take over themselves, minus 1.45 mills for special county services which the city would take over, plus 5 mills for operations of the new city as stipulated by the proposed charter for LaVista Hills. The adjusted breakdown of a non-homesteaded property owner’s tax dollar under that scenario would be 33.8 percent going to DeKalb, 54.7 percent going to DeKalb schools, and 11.5 percent going toward the new city.

In other words, unlike Decatur where the bulk of a net tax dollar is allocated to the city and city schools, LaVista Hills property owners would continue paying the bulk of their property taxes to DeKalb and its school system. However, those figures would be subject to change pending actual future year millage rates, homestead exemptions and HOST credits, and would vary by individual tax bill.

New bookkeeping rule shines sunlight on tax breaks

A new accounting rule would require local governments nationwide to disclose of how much tax revenue was forgone by virtue of abatement or payment-in-lieu-of-tax agreements between development authorities and property owners.

Such agreements have been a sore spot in Georgia for school systems in counties where development authorities have offered tax incentives to attract or retain businesses to their districts. The new rule should help with transparency about those tax incentives, and there is very good illustration of how the process will work under the Governmental Accounting Standards Board’s new rule.

That said, I can envision a couple complicating factors that limit the usefulness of the data. For one thing, these calculations may not really reflect foregone revenues, because if the incentives were not offered, then the business may have moved elsewhere.

Secondly, at least in Georgia, the calculations will require coordination between several different government entities and it may take a few iterations before everybody gets on the same page. If the calculation is a reporting requirement when a local government’s financial statements are being audited, the auditors are probably going to ask the county or city accountant, and they’re not going to know the answer because this data doesn’t exist yet. They will reach out to the tax commissioner who has no reason to calculate bills for property owners that do not receive tax bills. Then the tax commissioner’s office will need to calculate a theoretical bill based on the assessment then report that back to the city or county for inclusion in the audit.

Thirdly, this reporting requirement really only addresses abatements after the horse is out of the barn. School and local government elected officials won’t be able to do much other than complain about how much taxes the development authorities agreed to abate in the prior year. Georgia lawmakers have been considering proposals over the last year or two that would involve more advanced notification and even consent of school boards before such deals are struck.

Welcome back, Holly!

Congratulations to Holly Jackson on her new position as Administrative Services Assistant with the City of Decatur. In her new role, Holly is working for both the City personnel office and the tax office. This position was created in the FY15-16 budget. After a competitive hiring process, Holly was selected in August.

Holly had worked for the City of Decatur from 2010 to 2012 in the Revenue Division and in the former Planning, Zoning, and Inspections office. Holly is a Decatur resident and has two children who graduated from the Decatur school system.

Muscogee school board supports ending tax freeze

Political figures in Columbus have been pushing for a repeal of Muscogee County’s property tax freeze.  The school board there has signed on with the proposal to “thaw” the freeze.  If approved during the 2016 legislative session, assessments in Muscogee would begin rising with market in 2017 rather than being capped at a prior year's value.

The Columbus Ledger-Enquirer reports:

The majority of the Muscogee County School Board supports allowing voters to decide next year whether Columbus will thaw its property tax freeze.

In a 6-3 vote during Monday night's meeting, the board approved a resolution that requests the local legislative delegation to ask the Georgia General Assembly for permission to place Columbus Mayor Teresa Tomlinson's proposal on the Nov. 8, 2016, ballot...

DeKalb County also has a property tax freeze but it hasn’t been as controversial here as in Columbus.  The DeKalb freeze was extended until 2021 during the 2015 session of the General Assembly.  The City of Decatur does not use frozen values in the calculation of tax bills; it uses non-freeze values from DeKalb.

Decatur wins award for business license website

From left to right, Calvin Rhodes (chief information officer, State of Georgia), Ryan Wilson (VC3), Claire Miller (Children & Youth Services and Decatur Technology Committee), Russ Madison (Revenue Division & Technology Committee), and Shaun Shabazz (Revenue Division).

Decatur has received an Innovation Showcase 2015 award from the Georgia Technology Authority for two projects including the City’s business license renewal website at www.decaturgatax.com/BusinessLicense. The award was presented during the annual Georgia Digital Government Summit on Sept. 22.

The story behind the award is that the City of Decatur Revenue Division needed a way to make the license renewal process quick and easy for 1,700 business owners. The division looked to technology, and its online business license project culminated in the fall of 2013 with the launch of the website in partnership with Sturgis Web Services and Paypal. The website allows businesses to renew their license online without having to mail a paper check. The website also enables businesses to print their own license if they choose, after the payment has been applied to their account. Payments can be made by credit card or echeck with no additional fees charged to the business. The website was optimized for mobile devices in 2014.

Prior to the new website, a business could renew its business license in Decatur only by mailing a check along with notarized immigration affidavits or by physically taking printed materials to City Hall from 8 a.m. to 5 p.m. on weekdays. Businesses usually had to wait 7-10 business days to receive new licenses in the mail.

In addition, data about business licenses was available only internally. Businesses wanting information about their own records had to visit, call, fax or email the city’s Revenue Division. Customers had no easy way to access information about businesses they patronize, and anyone who wanted to know if a business was operating with a current, valid business license had to contact the city or submit an open records request. Depending on what they wanted to know – such as the business owner’s name and contact information – additional research may have been required by staff. Other city departments had to contact the Revenue Division if they needed information about a business.

Information about the other Georgia Technology Authority award winners and their projects can be found at http://gta.georgia.gov/technology-innovation-showcase.

North Georgia voters consider tax measures for infrastructure projects

In addition to the City Schools of Decatur bond referendum on Nov. 3, 2015, several other North Georgia jurisdictions are considering infrastructure projects that could affect property taxes or sales taxes.

Like Decatur, Pike County will have a school bond referendum.

Hall County and Baldwin County school boards are proposing special purpose local option sales taxes for education. Augusta is considering a seventh renewal of its special purpose local option sales tax. If the SPLOST is renewed, Augusta's sales tax will stay at 8 percent rather than falling to 7 percent.  Putnam County is also considering a SPLOST.

Recap of Decatur’s tax sale

Deputy Police Chief Keith Lee presides over Decatur's 2015 tax sale

During the City's annual tax sale on Aug. 4, 2015, the Revenue Division auctioned 13 tax deeds to satisfy delinquent taxes owed. Four of the properties were bid on by investors, five were bid on by the City for potential greenspace, and four properties received no bids and will remain on the City's delinquent list. No owner-occupied homes were among the properties auctioned.

The City's collection activities are an exhaustive process lasting at least seven months and involving at least seven different attempts to notify the property owner of the repercussions for nonpayment. Tax sales are a crucial component in maintaining the City's 99.9 percent collection rate for real property taxes.

Open for Columbus Day

City Hall, including the property tax office, will be open for business on Monday, October 12, from 8:00 a.m. until 5:00 p.m.  The DeKalb County tax commissioner's and tax assessors office should be open too.  Because post offices and banks will be closed, please note that if you attempt to mail or deliver us a payment, it will take an additional day before the payment clears.

Government agencies may "wait to see what happens" with EMV technology before upgrading systems

As credit card acceptance begins changing from magnetic stripe reading to chip-and-PIN transactions at retailers nationwide, a prominent e-government payment provider is advising government offices to wait before rolling out new systems. NIC Services says that government entities generally experience less fraudulent payments than the private sector, and that government merchants can sit on the sidelines unless particular agencies have experienced high rates of fraud or chargebacks. From Government Technology magazine on October 2: 

...As for whether government should rush to make the switch, Mukesh Patel, president of NIC Services, told Government Technology in July that his company is recommending that its public-sector partners analyze their history of chargebacks and fraudulent transactions, and then make a business decision as to whether it’s beneficial to invest heavily in the terminals.

“Just from our experience, with the 28 to 30 states we work with, government services in general don’t tend to have a high fraudulence rate," he said, "because as a citizen you wouldn’t go to your DMV and renew your own driver’s license with a stolen card. It would be very easy to find out who you are.” 

NIC’s recommendation is that unless an office encounters a high incidence of payment card fraud, they should wait to see what happens in the industry...

City endorses school exemption plan

During their meeting Monday night, the City Commission unanimously approved a resolution supporting the school board’s intentions to exempt homeowners age 65 and older from school taxes. The school system is seeking support from state senators and representatives in the area to carry the proposal forward in the Georgia General Assembly during its 2016 session. Final approval would require a majority vote in a public referendum.

Currently, homeowners become exempt from school taxes in Decatur when they turn 80 if they make less than $40,000 a year. School taxes represent about 60 percent of an average tax bill. I estimate that about 1,000 property owners would qualify for an age-65 school exemption.

Local governments weigh chip-and-PIN options

The new computer chips in consumers’ credit cards don’t just affect how retailers accept payments, but how government agencies accept credit card payments for fees, taxes, and merchandise. As of this month, if a consumer presents a card with a chip to a merchant (either private or public sector) and the merchant is only capable of reading the magnetic strip rather than the chip, then the merchant accepts the liability if fraud results from that transaction. An industry expert has written a piece in American City & County’s blog about how this shift in liability affects local governments: 

…City and county governments have several options for how they respond to the October deadline.

Deadline is not a mandate

Although the deadline shifts responsibility for fraudulent credit card charges from the card issuer to merchants that haven’t begun accepting chip cards, state and municipal governments are not required to have EMV-capable point-of-purchase terminals installed by Oct. 1. Credit card companies’ switch to microchipped cards will be only about 70 percent complete by year-end, according to CreditCard.com, and the new cards will include magnetic strips as well as chips, so agencies’ existing point-of-sale terminals will remain viable for the foreseeable future. There is still plenty of time for city and county governments to research the issue and determine what timing is best for them to convert to new EMV card devices. 

Cost could be an issue 

In part, that decision involves evaluating how quickly budgets allow for an equipment upgrade. Basic EMV-capable pay terminals start at around $200 each and go up from there, so purchasing and installing new equipment can represent a substantial capital expense. Further, EMV conversion is more complex than simply unplugging a current card reader and replacing it with a new one. The transition requires new back-end code and a certification process that can take several months…