GBI investigates improper homestead exemption

A Twiggs County commissioner allegedly attempted to "transfer" his disabled veterans exemption onto a house occupied by his son.  It is also alleged that he told a relative in the tax assessors office to make the change.  The Georgia Bureau of Investigation is looking into the case.

The disabled veterans property tax break is a statewide exemption available to a homeowner for their primary residence if they are considered 100 percent disabled by the federal Department of Veterans Affairs (VA).  Commissioner Tommie Lee Bryant is also accused of receiving the exemption for 20 years although he is considered 60 percent disabled.

During a Georgia Association of Tax Commissioners conference a couple of years ago, I heard a speaker from the Georgia Department of Veterans Service who argued that veterans who are compensated at a 100 percent level in terms of their benefits should also be granted the disabled veterans homestead exemption, even if they are not considered 100 percent disabled by the VA.  I think that is an appropriate standard if the applicant can document that he or she is being compensated at a 100 percent level.  From the news reports, it is difficult to tell whether or not Commissioner Bryant has that documentation.

I was somewhat surprised that the state has become involved in what looks at first glance to be an administrative question about property tax exemption eligibility.  However, using one's authority as a public official and influencing a relative to make the change probably escalated this case beyond the basic eligibility question.

More taxpayers opting for web payments

Online tax payments to the City of Decatur increased by 70 percent during our last fiscal year compared to the prior year. From July 2015 through June 2016, the city received over 1,600 web payments (credit card or e-check) for property taxes in excess of $4 million. The year before that, the city received 945 web payments for $2 million in taxes. The city has also experienced a 60 percent increase in the number of businesses renewing their license online with 18 percent of businesses now choosing to pay that way.

Paying online at www.decaturgatax.com has several advantages over sending checks through the mail or using an online bill paying service through a personal bank account. If you currently pay your taxes online through your personal bank account, we encourage you to consider switching to pay with an e-check directly through our website. At www.decaturgatax.com, you can access a full copy of your tax bill, while most major online banking services do not provide detailed bills. Secondly, using an online bill paying feature through your personal bank account may not allow you to include your property ID and tax year with your payment, which are the two essential pieces of information we need to post your payment to your account in a timely and accurate fashion. (Paying with an e-check through our website automatically provides the city with the property ID and tax year information.) Lastly, the e-check service we use is truly electronic, and no paper checks are generated or printed during the process, but with your online bill pay checks, we actually receive those checks as paper. 

Taxpayers should be aware that e-checks, like paper checks, generally take three to five days to clear the bank. It is not an immediate debit like online credit card transactions. Considering the clearing period, e-check payers are encouraged to pay at least five days prior to any formal payment deadline to help prevent any last-minute stress over whether your payment was received on time.

As part of the city's ongoing commitment to provide customers with electronic options, Decatur also accepts online payments for recreation programs, after-school and summer camp registration, parking tickets, commercial sanitation services, and storm water drainage fees.

Review of helpful book on tax lien and deed investing

The Complete Guide to Investing in Real Estate Tax Liens & Deeds, Revised Second Edition (2015) by Alan Northcott is a how-to guide for people interested in investing in tax sale and tax lien properties. Northcott, a tax sale investor himself, shows how liens, tax deeds, and tax sales work in different states and local jurisdictions. The book provides many tables and charts allowing investors to compare redemption periods by state and the variety of premiums associated with redemption, in other words, the different potential returns on investment (ROI). These charts allow investors to make more informed decisions about which jurisdictions best suit the individual investor’s needs.

As a property tax administrator, I felt that the book was also helpful to put our own practices as a municipality into a broader context. For example, I did not realize than many jurisdictions require investors to register before they can bid at tax sales. Also, I did not fully realize that some states are “tax lien” states, meaning that they authorize local governments only to sell tax liens, not the underlying deed, while other states are pure “tax deed” states, where ownership immediately transfers from the delinquent owner to the successful bidder after a tax sale. The book describes Georgia as one of 11 “hybrid tax deed” states, where ownership is transferred if the original owner does not redeem the property within the required time period. I also found it useful to see which states are most closely aligned with Georgia’s practices. Tennessee appears to share several traits with Georgia’s delinquent collections and tax sale law. This information could be helpful when building peer relationships in other states. In property tax world, opportunities for networking and professional development exist within states, but not usually across state lines since there is no national property tax.

One aspect of the book I didn’t agree with was its assertion that most property owners who lose their properties at tax sales redeem their property, resulting in predictable returns on investment for tax lien and tax deed investors. In my experience in our location, that is not the case. To illustrate, picture a property owner who cannot pay $5,000 in back taxes. The property is auctioned at a tax sale for $100,000. The redemption amount in Georgia would be $120,000. The original owner receives the excess funds from the sale minus the taxes ($95,000). Now the original owner is $25,000 short from the redemption price. If the owner couldn’t come up with $5,000 to prevent the tax sale in the first place, the owner will rarely be able to come up with $25,000 to redeem their property. Northcott’s statement may be correct in the context of states with smaller premiums, but investors should be aware of that may not be the case everywhere.

An unexpected bonus about 85 percent of the way into the book is a very helpful chart and explanation of “first liens.” In order to foreclose the right to redeem on a property, the holder of a “second tax lien” has to pay off the first lien. Somebody with a third lien would have to pay off the first and second liens. Mortgages and other private debts constitute lesser liens than tax liens. Lesser precedent liens and mortgages do not have to be paid off in order for the holder of a first lien to foreclose the right to redeem. This is an essential concept to understand in Georgia, where case law has indicated that a creditor who redeems a property previously sold at a tax sale obtains a first lien or “super lien” that trumps other liens.

I recommend this book to people considering tax sale investments and to property tax professionals involved with delinquent collections.

Missing mail? Post office offers online tool

If your mail hasn't arrived after 7 business days, the post office has a new solution for you to report it.  Even if you didn't pay for tracking, you can report and search for missing mail or packages.

To use the service, go to https://www.usps.com/help/missing-mail.htm.  You have to have an online account with USPS for it to work.  Once you've logged in, the website will ask you for the mailing date, how it was mailed (such as first class), where you want the mail returned to if found, who to contact about the mail, and the contents of the mail.

As a billing agency, especially when dealing with delinquent accounts, we hear many comments such as, "I never got a bill."  My office has made mistakes with mail-outs, and sometimes it's the property owner who is mistaken, but we also hear several credible complaints each billing cycle that a bill or payment was literally lost in the mail.

We also interact with many Decatur residents, dozens of whom have complained for years to us about postal delivery service in Decatur.  Since the post office is a federal agency which is totally separate from city government, all we have typically been able to do is to refer those residents to the post office or to the postmaster.  It is nice to know that this additional tool is available.

Referendum set for homestead exemptions

The City Commission has approved a call for a special election this November to expand several homestead exemptions. Homestead exemptions reduce property taxes for eligible homeowners by reducing the assessed value of their homes. Five separate questions will be posed on the ballot.

The first ballot question, which refers to Senate Bill 339, would increase the amount exempted for a basic homestead exemption from $20,000 to $25,000. The second question, referring to SB 340, would increase an existing exemption for homeowners over the age of 65 from $1,000 to $10,000. The third question refers to SB 341 which will remove an obsolete exemption from the books. The fourth question would create a new exemption for low to moderate income homeowners over age 62 per SB 342. The final question is an exemption from school property taxes for homeowners over the age of 65—an exemption that would expire in five years if it is not renewed by then.

Here is the wording of Decatur’s homestead exemption ballot questions:

Senate Bill 339, Act No. 382
Shall the Act be approved which provides a homestead exemption from City of Decatur ad valorem taxes for municipal purposes in the amount of $25,000.00 of the assessed value of the homestead for residents of the City of Decatur?
( ) YES
( ) NO

Senate Bill 340, Act No. 383
Shall the Act be approved which provides a homestead exemption from City of Decatur ad valorem taxes for municipal purposes and from City of Decatur independent school district ad valorem taxes for educational purposes in the amount of $50,000.00 of the assessed value of the homestead for residents of that city who are 62 years of age or older and whose income does not exceed $25,000.000, and which provides a homestead exemption from City of Decatur ad valorem taxes for municipal purposes in the amount of $10,000.00 of the assessed value of the homestead for residents of that city who are 65 years of age or older?
( ) YES
( ) NO

Senate Bill 341, Act No. 384
Shall the Act be approved which repeals an obsolete homestead exemption for the residents of the City of Decatur?
( ) YES
( ) NO

Senate Bill 342, Act No. 385
Shall the Act be approved which provides a homestead exemption from City of Decatur ad valorem taxes for municipal purposes except for ad valorem taxes levied to pay interest on and to retire municipal bonded indebtedness in the amount of $15,000.00 of the assessed value of the homestead for residents of that city who are 62 years of age or older and whose income does not exceed $50,000.00?
( ) YES
( ) NO

Senate Bill 343, Act No. 386
Shall the Act be provided which provides a homestead exemption from City of Decatur independent school district ad valorem taxes for educational purposes for five years in the full amount of the assessed value of the homestead for residents of that school district who are 65 years of age or older?
( ) YES
( ) NO

DeKalb sets millage rates

DeKalb County approved its mid-year budget adjustments and millage rates during their July 19 meeting. The millage rates include tax levies for both unincorporated DeKalb County and rates specific to city residents for county property tax billing purposes. The millage rate for county tax bills on properties within Decatur’s city limits is described in DeKalb’s levying resolution as follows:

A Tax of $10.715 per every $1,000.00 of assessed valuation is levied on all taxable property within the corporate limits of Decatur in said County, for General County Purposes to pay expenses of administration of County Government, build and repair public buildings and bridges, and pay expenses of Courts, Sheriffs, litigation and support of prisoners, pursuant to Article IX, Section IV, Paragraph I of the Constitution of the State of Georgia (9.240); to provide for the expenditures designated in the contract with the Fulton-DeKalb Hospital Authority and the DeKalb Hospital Authority (0.740); and to pay expenses of County nonbasic police protection (0.207), and street and road maintenance of curbs, sidewalks, streetlights, and devices to control the flow of traffic on streets and roads, or any combination thereof (0.528), pursuant to the DeKalb County Special Services Tax Districts Act, Ga. L. 1982, p. 4396, as amended. 

The county millage rate on Decatur properties of 10.715 is lower than in 2015, when it was 11.92 mills. Decatur sets its own millage rates for the purposes of city property tax billing separate from the county.

Decatur finalizes millage rates for 2016

During their Monday night meeting, the Decatur City Commission adopted the school millage rate approved earlier by the Decatur Board of Education.  The school millage rate of 18.66 is the same as it was last year.  The City approved its own millage rates in June.  The combined millage rate for 2016 is 31.83 mills as shown in the table below.

Fund	Millage
General Fund	9.3
Capital	1
DDA	0.38
Bond	0.92
School Bond	1.57
School	18.66
Total	31.83

The combined millage rate during the 1st installment billing was 32.23 mills.  The millage rate for 2015 was 30.66 and did not include a school bond charge.

City Commission considers tax proposals

Decatur’s City Commission will vote tonight on the school board’s proposed property tax millage rate for 2016. The school board previously voted to maintain its existing rate from 2015 of 18.66 mills. Decatur’s charter requires the City Commission to approve the rate proposed by the school board.

The City Commission will also consider calling an election to vote on several proposed homestead exemptions. This is for the exemptions authorized by the state legislature earlier this year for public referendum in November. The ballot measures would include adding a new school exemption for seniors, adding a new city exemption, expanding two existing city exemptions, and repealing a defunct exemption provision.

The meeting will take place at City Hall, 509 North McDonough Street, at 7:30 p.m. with the property tax-related items toward the beginning of the meeting.