Gwinnett uses senior exemptions to woo retirees

An article entitled “10 reasons why you should retire in Gwinnett County” recently appeared in the Atlanta Journal Constitution. It listed the number one reason to retire in Gwinnett as a homestead exemption from school taxes for seniors, saying:

1. Gwinnett has several exemptions for property taxes, including two for seniors, county communications director Joe Sorenson told The Atlanta Journal-Constitution.

• The Senior School Tax Exemption (L5A) provides seniors ages 65 and older a 100 percent exemption from taxes levied by the Gwinnett County Board of Education on your home and up to one acre of property.
• The Regular School Tax Exemption (S3) provides seniors ages 62 and older a partial exemption from school taxes. 

Although the article doesn't mention it, Gwinnett's website says there are income restrictions to qualify for their two senior exemptions.

Voters in Decatur will have the chance to decide in November whether there should be an exemption here (similar to Gwinnett's L5A), which would exempt homeowners over the age of 65 for at least the next five years.

State agencies not immune in property tax lawsuit

Last December, property owners on Sapelo Island sued McIntosh County and the State of Georgia for discrimination and neglect. The lawsuit is based largely on the allegation that the Geechee property owners are paying county property taxes based on soaring assessments without receiving services in exchange. The State of Georgia requested that the state be dropped from the lawsuit, partly on grounds of sovereign immunity. A federal judge recently ruled that most of Georgia's agencies, including the Department of Natural Resources, are not immune from being sued.

The news comes from the Associated Press:

Key Georgia Agencies Not Immune in Slave Descendant Lawsuit

By Russ Bynum

Associated Press SAVANNAH, Ga. — Jun 22, 2016, 5:18 PM ET

A federal judge ruled that key Georgia agencies are not immune from a lawsuit that claims one of the last Gullah-Geechee communities of slave descendants on the Southeast coast is being eroded by discrimination and neglect.

Residents and landowners from the tiny Hogg Hummock community on remote Sapelo Island sued the state and McIntosh County last December in U.S. District Court. The lawsuit says the enclave of about 50 black residents is shrinking rapidly as landowners are pressured to sell because they pay high property taxes yet receive few basic services...

Reachable only by boat from the mainland, the largely undeveloped barrier island about 60 miles south of Savannah has no schools, police, fire department or trash collection.

Attorneys for the state asked the judge to dismiss the lawsuit. They argued the Department of Natural Resources, which manages most of Sapelo Island, and other agencies are immune under the 11th Amendment, which grants states broad protection from lawsuits in federal court.

In a ruling last Friday, Judge Lisa Godbey Wood in Brunswick granted immunity to just one agency — the Sapelo Island Heritage Authority — and ordered that it be dropped from the lawsuit. Other defendants including the Department of Natural Resources, Gov. Nathan Deal, McIntosh County, county Sheriff Stephen Jessup and the county Board of Tax Assessors still face civil claims.

However, the judge declared both the sheriff and the tax assessors immune from monetary damages in the case.

Wood is still considering other arguments for dismissal that are not related to immunity.

Walker County shows how tax anticipation notes work

While Decatur sends out tax bills every six months, most tax jurisdictions in Georgia send out bills once a year. For many cities and counties, that means a surge of revenues once a year and decreased cash flow during other months. To deal with this, some local governments rely on tax anticipation notes. This recent article about Walker County illustrate how TANs work in Georgia: 

Walker County borrows to pay bills: Tax anticipation notes commonly used as a budgeting tool

It sounds worse than it is.

The county is borrowing up to $5 million to cover operating expenses. But taking out a tax anticipation loan is something often used by county governments across Georgia as a way to match expenditures with revenue.

“Nearly all counties operate with tax anticipation notes,” Walker County Tax Commissioner Carolyn Walker said. “That is mainly because taxes are collected in the last three months, October through December. That is normal.

Walker said the county’s primary source of revenue is derived from taxing property. Until state law changed a few years ago automobile sales boosted collections. But now, the tax commissioner said no ad valorum tax is collected annually and the county receives just a portion of the 7 percent on the purchase price.

“That’s all,” Walker said. “Except for $1-per-tag collected from license plates.

“This year, by the end of December we had 96 percent of the (property tax) money collected and disbursed.”

During her June 9 public meeting, Commissioner Bebe Heiskell signed documents to obtain a line of credit — up to $5 million of temporary financing —that will be repaid with taxes receipts that are due before year’s end. #The county has assets valued at $107 million and projects collecting about $27 million in taxes for 2016, she said. “We’ll draw it down as needed, and I hope we don’t need it all,” she said. “This is to pay for the county’s business.”

By law, counties cannot borrow more than 75 percent of the total gross amount, including special purpose local option taxes (LOST, SPLOST, ESPLOST), collected in the previous calendar year. The amount borrowed must be repaid in full, with interest, before the end of the calendar year. #Walker County’s recent TAN carries an annual interest of 4.25 percent, payable on the amounts actually borrowed.

Heiskell noted that this year’s loan will be less than half of that required for 2015, the year when Walker County was forced to repay a loan guarantee for operations at the bankrupt Hutcheson hospital.

In Rome, similar tax anticipation notes — slightly more than $6 million worth — were issued last month to cover costs of operating schools. It is something done nearly every year during the summer months and the TANs are repaid when property taxes, due in mid-November, are paid.

Counties use TANs to even out revenue collections during the course of a year. The process is similar to utility companies allowing customers to make equal monthly payments based on historical usage, something that allows predictable budgeting over the course of a year.

“This is operating money for the months when we don’t have a lot of money coming in,” Walker said.

Catoosa County Chief Financial Officer Carl Henson said use of anticipation notes is not at all uncommon.

“It’s just something to use until you collect taxes,” he said.

Henson said that the low period for collecting revenue, from September to December, is often times when county governments will either borrow money or arrange for lines of credit.

“It (TANs) was developed to meet a need,” he said.

Since it is such a regular occurrence, a lot of counties do not put out requests for bids but will just go to their local bank every year obtain these letters of credit that allow them to meet payrolls and pay bills, Henson said.

And there are strict regulations about how such notes can be issued, used and repaid.

Decatur adopts millage rate for 2016

The City Commission approved millage rates for 2016 during its meeting Monday night. The general fund millage rate is decreasing from 9.7 mills in 2015 to 9.3 mills in 2016. The other millage rates for city taxes are the same as they were for the 1st installment property tax billing of 2016.  The rates are shown below:

General fund (operations):  9.3 mills
Capital improvements:  1.0 mills
Downtown Development Authority:  0.38 mills
Bond service:  0.92 mills
Bond (school) service:  1.57 mills

Although the general fund millage rate is decreasing, a tax increase was advertised under the requirements of Georgia law because rising assessments are projected to offset the lower tax rate. The city property tax bill (for a property that didn’t change in value since last year) would decrease by about $40 per $100,000 in assessed value because of the lower rate. For example, the bill for a property assessed at $200,000 ($400,000 fair market value) would decrease by $80 if there were no change in value since last year.

The school millage rate remains to be determined by the school board. Last year the school rate was 18.66 mills.

Georgia rolls out two-factor authentication for online tax services

Taxpayers who electronically file or pay sales taxes, motor fuel taxes, alcohol or tobacco taxes, or withhold state income taxes can now opt-in for a two-factor authentication program offered by the Georgia Department of Revenue (DOR). In addition to user names and passwords, participating business taxpayers will receive an authentication code on their phone or email that they will use as a second factor to log into their Georgia Tax Center (GTC) accounts. Businesses that want to sign-up can log into their GTC profile and adjust their settings to participate.  More details are on DOR's website here.

The DOR is doing this to prevent unauthorized access and stay current with standard security measures. This is an encouraging step given the increase in cyber-security threats targeted against taxpayers and tax agencies.

DeKalb provides deed alert system

The DeKalb County superior court clerk’s real estate office records all deeds in the county. According to the real estate division’s website, they receive and process over 120,000 documents a year. Given that volume, it is understandable that sometimes the right information may not be recorded, either due to an honest mistake by the person or entity filing the document or the person processing it, or due to something more sinister.

In 2014, the superior court clerk Debra DeBerry launched a property fraud registry alert system. The clerk’s office says, “The system is designed to provide property owners with the ability to register properties and receive notice anytime something is recorded on their property.” WSB-TV reported that it was the first real estate fraud alert system in the state. WSB also reported that DeKalb County has been “at the center” of house stealing schemes in Georgia.

Late last year, The Wall Street Journal reported that deed fraud is on the rise. They reported that “Investors who own several properties are especially vulnerable, prosecutors said, as they are less likely to notice if someone moves into a home they don’t visit regularly.” A booming real estate market can also tempt fraudsters.

DeKalb’s fraud registry seems like a good system for making property owners aware of documents filed involving their property. In my role with property taxes, I have observed several instances where it would have been helpful to receive an alert about a filing on particular properties.

You can sign up for the registry here.

Tax payment grace period ends June 15

The deadline to pay property taxes in Decatur for the 1st installment of 2016 was June 1.  Although the deadline has passed, Decatur offers a grace period during which no penalties or interest apply to late payments.  That grace period ends on Wednesday, June 15.  Unpaid taxes after that date will accrue a 10 percent penalty and 1 percent interest per month.  To check the status of your account or make an online payment, go to www.decaturgatax.com.  For general information about property taxes in Decatur including a description of other payment options, visit www.decaturga.com/taxes.

City approves fee increases

The Decatur City Commission has approved an increase in residential sanitation and storm water utility fees for 2016. These fees are added to property tax bills. The typical household will have a $50 increase in October on their 2nd installment bill for 2016.

Residential sanitation fees are for garbage pick-up. The fee adopted earlier this year was $250 per household. The newly approved rate is $275.  The purpose of the increase is to cover curbside glass recycling beginning July 1. 

Storm water utility fees are used to make storm drainage improvements. Properties are assessed a storm water utility fee based on the amount of paved and covered areas on the property. The storm water utility fee has been $75 annually for each single-family residence for over 10 years. Commercial, institutional and multiple-family properties with larger paved areas pay proportionately more in fees. Utility fees are charged to all property owners, including tax-exempt properties. The newly approved fee is $100 per equivalent residential unit.

Most property owners have already paid the original amount of the fees for these services during the 1st installment property tax billing this year and will only owe the difference of the increase during the 2nd installment.

DeKalb assessment notices to be sent June 3

DeKalb County assesses the values of all properties in the county and its cities. Per state law, counties are required to mail out assessment notices annually. DeKalb will mail out their assessment notices on June 3. The notice will advise you of your property value for 2016. I encourage all property owners to pay extremely close attention to the figures and deadlines on the notice. The 2016 value will be the basis of your DeKalb County property tax bill in the fall and, for Decatur property owners, your 2nd installment tax bill for 2016. 

Here are a few tips for reading your assessment notice. Assuming that the county formats it like previous years, your 100 percent value for 2016 will appear toward the center of the notice. That’s what you want to look at first. If the value doesn’t seem right to you, think about whether you could sell your property for that amount. If you conclude that the assessment does not accurately reflect market value, you may consider appealing. You will see the appeal deadline printed toward the top of the bill, which is 45 days from the date of the notice. (It will probably say July 18.) DeKalb warns, “If you do not file an appeal by this date, your right to file an appeal will be lost. Late appeals will not be processed.” If you don’t receive a paper notice for each of your properties, you should be able to access notices on DeKalb’s property appraisal website.

If you have questions about your assessment or the appeal process, call DeKalb County. Toward the middle of the notice, right above the “grid” area, you should see the names and phone numbers of staff contacts who can assist you with questions about your assessment. Your best bet is to call the staff contacts on your notice because they have the expertise for the location and the classification of your property. (If you’re going in person, note that the assessors have moved out of the their old location in the Callaway Building to their new location at the Maloof Building, 1300 Commerce Drive in Decatur, where the water department used to be.) Please keep in mind that the City of Decatur is unable to answer questions about the values DeKalb determined.

At the bottom of the notice you’ll see estimates for property taxes for the year. However, the estimates are based on last year’s millage rates because this year’s have not been approved yet. You will also see a disclaimer that “City exemptions may not be included in this estimate.” Decatur exemptions definitely will not be included in the estimate on your assessment notice. Decatur maintains its own homestead exemptions and exemption data. DeKalb does not know how Decatur’s exemptions affect city bills for individual homeowners. To get a more accurate projection, pull out your Decatur tax bill from the 2nd installment of 2015. Look at the amount of tax savings due to homestead exemptions. Take that amount and subtract it from the city estimate on the assessment notice for 2016. If you have homestead exemptions with the City of Decatur, your actual bill in the fall of 2016 will be lower than what DeKalb estimates for your city taxes.

Please be aware that the current assessment notice no bearing on your property tax bill in 2015 or the city's 1st installment bill of 2016. Decatur’s 1st installment property tax bills are always based on the prior year’s value (your 2015 value). The assessment notice for 2016 does not change the value on your 1st installment 2016 city bill, and it does not change the amount that was due yesterday, June 1. Decatur’s 2nd installment trues up the total amount due for the year based on your final value and whatever millage rates are approved before the billing in October.