Property taxpayer news

The special election to fill state Senate District 42 is today. Decatur News Online has been covering the candidates’ positions including what their budget priorities would be during an era of dwindling tax revenues.

For his advocacy of SB 346, state Sen. Chip Rogers has been named legislator of the year by Georgia Property Taxpayers Committee. GaPTC also named Rep. Ed Lindsey.

In a class action securities fraud case, Countrywide has agreed to a $600 million settlement for misrepresenting the quality of its loan portfolio to investors. Until collapsing during the nationwide mortgage meltdown and being taken over by Bank of America, Countrywide was the biggest mortgage lender in America.

Proposition 13, California’s landmark 1978 measure that capped property tax assessments, and arguably inspired legislative reform proposals nationwide and in Georgia over the last several years (such as HB 233, HR1, and SB 346), is undergoing new scrutiny by lawmakers in Sacramento. Some critics have blamed property tax reforms for California’s fiscal problems.

Lawmakers tout assessment reform

Early on during the 2010 legislative session, SB 346 faced opposition from some officials about allowing year-round assessments. Their argument was that it would be too difficult to budget for when you have an unknown number of people who could appeal their value at any given time. But after scrapping that part of the bill, the Senate passed the bill unanimously.

The House wasn’t completely satisfied with the language in the bill that came over to them. They cleaned up the legal wording, inserted clauses to encourage electronic notices of assessment, and changed the Senate’s proposal for property value arbitration. An overwhelming majority of representatives (137 to 7) voted for the House substitute.

Now, any initial disagreements appear to be water under the bridge as state legislators head back home to highlight legislative accomplishments during the 2010 session, especially SB 346. Here’s a sampling of what state legislators are telling their voters:

Sen. Bill Heath (R-Bremen) declared, “Georgia’s property owners triumphed with the overwhelming bi-partisan support of Senate Bill 346.”

Rep. Lee Thompson (D-Lawrenceville) announced to his constituents that SB 346 passed and “is aimed at protecting taxpayers from unfair assessments and guaranteeing the right to appeal.”

Sen. Chip Rogers (R-Woodstock), the architect of SB 346, calls it “a point of pride.” The Marietta Daily Journal reported, “Rogers said a point of pride is his Property Tax Assessment and Appeals reform bill, Senate Bill 346, which is aimed at ensuring all Georgia properties are properly assessed at fair market value and that property owners have guaranteed rights to appeal. Rogers called it the most sweeping overhaul of the Georgia property tax system in decades.”

Rep. Barbara Macey Reece (D-Menlo) used nearly identical language as Lee Thompson (I think this must come from some type of press release template) saying, “Lawmakers gave final passage to comprehensive property tax reform legislation April 29. SB 346 is aimed at protecting taxpayers from unfair assessments and guaranteeing the right to appeal. The bill requires that every property owner receive an annual Notice of Assessment that includes the estimated property tax and expands the appeal time from 30 to 45 days. All relevant sales, including distress sales, must be included when determining Fair Market Value.”

Rep. John Lunsford (R-McDonough) said, “In an effort to give greater rights to our property owners and to expand those rights, the legislature passed Property Tax Reform, Senate Bill 346. This bill will protect taxpaying property owners by guaranteeing their right to appeal assessments and protecting them from unfair tax assessments.”

Sen. Tommie Williams (R-Lyons) said, “SB 346 revises numerous provisions relating to real property tax assessments and appeals and is considered to be the most sweeping overhaul of Georgia’s property tax system in decades.”

But not all reviews have been so positive. As noted earlier, some property taxpayers themselves have been more skeptical about the provisions of the bill. Also, Brett Harrington, an appraisal professional and blogger at Taxing Issues, has expressed concerns that SB 346 may not be “pro-taxpayer.” In response to my comment about SB 346’s requirement to fix the purchase price of a property as its property value for tax purposes for one year, Harrington noted:

Regarding the purchase price requirement, I agree, it could be significant. However, I am not 100% sure it is entirely taxpayer friendly. In some respects it places an emphasis on the purchase price, which can be problematic. This has been the case in places like CA & OH. When it comes to commercial/industrial transactions, the purchase price is not always the best indicator of market value for property tax purposes.

I believe the annual notice requirement is a favorable requirement. However, I think that changing/eliminating the “annual return” requirement would be much better. Taxpayers can file a return annually to initiate an appeal, but most taxpayers do not know this. What about eliminating the return requirement and allowing taxpayers to appeal after they receive their tax bills? Not only would it provide the opportunity to appeal, it would also be more cost and time effective for the municipalities.

Harrington concluded that, “Overall, in my opinion, this bill constitutes tweaks far more than reform.”

SB 346 awaits governor's signature

The final version of SB 346 (which I’ve described and given updates on here, here, and here) passed the Georgia General Assembly today. The AJC’s Gold Dome Live blog gives this summary:

A long-promised property tax reform bill — promising annual assessments and longer appeal time — received final passage from the General Assembly Thursday.

“With the passage of SB 346, we will protect taxpayers from unfair assessments and guarantee the right to appeal,” Senate Majority Leader Chip Rogers (R-Woodstock said). “While this is a huge victory for Georgia property owners, it’s only part of the solution to providing a system that actually works With the passage of SB 346, we will protect taxpayers from unfair assessments and guarantee the right to appeal.”

The bill, considered the most sweeping overhaul of Georgia’s property tax system, would:

• Requirement that every property owner receive annual Notice of Assessment, which guarantees right to appeal
• Every Notice of Assessment must contain estimated property tax
• Expansion of appeal time-period from 30 to 45 days
• Alternative streamlined appeal option for property valued in excess of $1,000,000
• Automatic taxpayer victory on appeals when government fails to respond within 45 days
• Requirement that all relevant sales, including distress sales, be included when determining Fair Market Value
• Requirement that only “current use of property” be used in determining Fair Market Value
• Taxpayer must be given access to all data used in determining Fair Market Value
• Sales price establishes Fair Market Value for next tax year

Rep. Ed Lindsey (R-Atlanta), who squired the bill through the House, said before the House’s final vote Thursday that the bill should give “greater rights to our property owners when it comes to appeals."

Property assessment bill advances

SB 346 passed the state House yesterday. The Macon Telegraph ran this Associated Press story about the bill:

ATLANTA -- The House has approved a wide-ranging overhaul of property taxes in Georgia.

The bill's supporters say it's designed to create uniformity in the way homes are taxed and to give homeowners access to more information.

It passed the House 137-7 on Wednesday.

The bill requires that homes be assessed every year. It extends the appeals process from 30 to 45 days and requires that all comparable sales, including bank sales and foreclosures, must be applied when officials set an assessed value.

The bill has already passed the state Senate but the House made minor changes so it must return there for another vote.

State Rep. Ed Lindsey, an Atlanta Republican, said the bill would create transparency and fairness.

The Senate passed an earlier version of the bill unanimously in March.  There were a couple of nay votes on the bill in the House.  Among the lawmakers who represent portions of the City of Decatur, Rep. Mary Margaret Oliver voted yes, Rep. Stephanie Stuckey Benfield voted yes, and Rep. Stacey Abrams did not vote.

After the Senate passes this new amended version of the bill, it goes to the governor’s desk.

It should be noted that saying the bill “requires that homes be assessed every year” is misleading. The bill doesn’t require annual appraisals; it requires that notices of assessment be sent annually.

Property assessments in a down market

All counties in Georgia are subject to the same state laws regarding property assessments for taxes. Although this story in today’s news from coastal Georgia is about Glynn County, the article does a good job of explaining why county assessments in Georgia may not capture the full decline in a property’s fair market values even when real estate is weak.

“Property tax digest may see little change”

4/19/2010

By NEVIN BATIWALLA The Brunswick News

Some homeowners hoping for property tax relief may be in for a rude awakening next month when Glynn County releases new property valuations.

While a small number of homes will drop in value, resulting in lower tax bills for owners, thousands of parcels won't dip in value at all.

How can that be when it seems almost everyone's house has lost value in an unprecedented nationwide real estate meltdown?

To determine what a house is worth, the county uses a complex mathematical system based heavily on sale prices of other houses in a neighborhood.

In years with a lot of sales, it works well because appraisers have more data from which to calculate a more accurate value for similar houses.

But when houses are not selling, as in today's weak housing market, it becomes more difficult to determine a true value.

"Our system doesn't work as well in low sales," County Chief Appraiser Bobby Gerhardt said.

As a result, homeowners in neighborhoods in which no houses have been sold will likely see no change in their values, he said.

Legislative action on property taxes

Yesterday was a busy day at the state capitol. Amidst a flurry of legislation being considered during the final days of the session, the Georgia General Assembly moved closer toward enacting two property tax related measures.

1. One bill would phase out of state’s share of property tax collections over the next five years. (The Senate had already passed SB 517 which would have ended the state’s portion immediately, but that bill looks moot now.)  According to the Macon Telegraph, the newly proposed five-year phase out was tacked on to a bill about license plate and poultry inspection fees (HB 1055), and was designed in part to make the state budget more palatable to lawmakers. 
2. SB 346, which would reform property valuations and appeals, was approved by the House Ways & Means Committee. The committee made several revisions including 1) improved legal wording of the bill, 2) requiring annual assessment notices but moving the notification date to July, 3) giving the option of sending assessment notices electronically if the jurisdiction is able to and the taxpayer chooses to, and 4) changing the arbitration process. Now the bill moves to the Rules Committee to be scheduled for a floor vote in the House.

My prior posts about the state’s share of property tax revenues is here and details about SB 346 are here.

Mixed reaction to SB 346

The passage of Senate Bill 346 has elicited strong reactions over on the AJC’s “Gold Dome Live” blog. Some readers are thrilled about the bill; some see it as useless. Here’s a sampling:

Munroe Burbank:  "This is not good, and has absolutely nothing to do with lowering taxes. Sure, these days, assessments probably show a downward trend because of housing market crisis, but this won’t last forever. I was assessed every 3 – 4 years from 1996 – 2006, and each time my taxes went up because the value of my property went up. Once the economy is back on its feet and real estate values rebound, this yearly assessment will amount to an annual property tax increase."

RSJ:  “SB346 is a very good piece of legislation. It adds transparency to the assessment process and removes the need for filing a return to initiate an assessment appeal. Prior to this law, if the County elected not to send a taxpayer an assessment notice, the taxpayer had no appeal remedy for the current years’ assessment, unless they went to the County between Jan and March or April and filed a form called a real property tax return. Guess what – 99% of the citizens of this state had no idea that this was the process and thus when their tax bill came in the mail, there was no recourse. Now, at least the taxpayer will be formally notified each and every year what their assessment will be and it will be up to them to take action as to whether or not they feel an appeal is warranted. SB346 has some components that are not perfect but, overall, it is a solid example of our elected offficials acting as good legislators instead of just good politicians.”

“None Supporter of SB346”:  “This legislation is a tool to force county assessors [sic] office to go broke so that the state can eliminate property taxes in each county, take over pushing for a state sales tax increase so that they control how much money goes to each county. Remeber [sic] folks, the propery [sic] tax bill you now pay is arrived at the amount of dollars it takes to run your county divided by the total assessment of the county. Now, take that away and you sales taxes will surely skyrocket! Then the political game of who and what county receives the sales tax collected, oh, wait, the state still owes the counties of Georgia millions of collected sales taxes in error already, cough up please Mr. Sonny.”

Read all the comments for yourself here.

Senate passes property assessment bill

The state Senate passed SB 346 yesterday by a 54-0 vote.

Sen. Ronald Ramsey (D), who represents a portion of DeKalb County, told the Atlanta Business Chronicle that “This bill is taxpayer relief. It will restore people’s faith in government.”

The bill would set the sale price of a home as the fair market value for tax purposes for one year following the sale. The legislation would also require counties to mail out assessment notices annually, which would give property owners the chance to challenge their assessments, and would extend the window to appeal to 45 days.

Here are more details from the Macon Telegraph:

ATLANTA — The state Senate approved a major overhaul to Georgia’s property tax system Thursday, continuing a multi-year effort to hold down the taxes local governments depend on and homeowners seem to hate.

Senate Bill 346, sponsored by Senate Majority Leader Chip Rogers, passed unanimously and moves now to the House of Representatives, where similar reforms also are popular. Rogers’ bill includes dozens of changes, but the idea behind them is to keep property assessments from ballooning.

Those assessments — basically an estimation of a home or other property’s value — are used in conjunction with local millage rates to figure annual tax bills. But as the mortgage crisis has forced home values down, assessments haven’t kept pace, leaving many people feeling their property taxes are unfairly high. Rogers’ bill requires that assessment notices be sent to property owners every year. It extends the appeals process from 30 to 45 days and requires that all comparable sales, including bank sales and foreclosures, must be applied when officials set an assessed value.

It also locks in a home’s assessed value for one year after it sells.

Other property tax legislation is moving forward in the House, aimed at capping the annual increase in a home’s tax value, regardless of what the housing market does. House Resolution 1 and House Bill 517, both of which deal with such caps, passed the House Ways and Means Committee on Thursday.

Efforts to cap assessment growth failed last year, but House Republicans are pushing the matter again. Rogers’ reforms seem to have wider appeal. For example, Democrats who blocked House Resolution 1 last year have said they won’t fight Rogers’ bill.

The bill is expected to receive bipartisan support in the state House.

Senate scraps year-round appeal proposal

Senate Bill 346, which would make significant changes to property assessments and the appeals process in Georgia, was favorably reported out by committee yesterday.

But the proposed bill has been amended to remove a key provision from the bill.  Rather than allowing for year-round appeals, the bill would simply extend the current 30-day appeal window to a 45-day window.

The proposed requirements for counties to send assessment notices to property owners annually (which would give owners more frequent opportunity to appeal) and setting the sale price of a home as the maximum fair market value for one year following the sale remain in the bill.

While the substitute language makes the overall bill less controversial, The Chattanooga Times Free Press reports today that there are still lingering concerns by county officials that the state proposal puts new administrative requirements on local governments without funding them.

GPB had reported earlier this month that the property assessment bill would be withdrawn pending the state’s February revenues. That appears to have been an inaccurate prediction since the numbers announced today are abysmal and most of the original measures in SB 346 are still on the table.

Georgia tax news roundup

Last night, Georgia Public Broadcasting’s Valerie Edwards reported that “A Senate proposal to revise how property taxes are assessed was withdrawn pending February revenue numbers.” (See this “Lawmakers” video about one-quarter of the way through). The broadcast did not specify whether the bill withdrawn was SB 346 or another property tax measure (although I don’t know of any other property tax bills in the Senate right now). I called the Secretary of the Senate’s office to confirm, but they said that SB 346 was still listed in their paperwork as “in committee.” If the GPB report is true, this would be a surprising reversal from state legislators.

In other news, today’s AJC raises concerns that metro-Atlanta property assessors have overvalued homes in the region.

This morning, WSB’s Clark Howard has written up several tips on appealing your property assessment. As a reminder, property appeals in Decatur are handled by DeKalb County and must be filed with them by March 1.

Lastly, new efforts underway in the Georgia General Assembly may lead to higher occupational tax collections. In an attempt to increase plummeting sales tax revenues, state legislators are moving toward requiring the state Department of Revenue to share sales tax certificate information with local jurisdictions in exchange for local information about which businesses have licenses. The idea is that the information sharing would lead to detection of businesses that are not paying their sales taxes or occupational sales taxes.

State Senate considers property tax changes

As expected, state senator Chip Rogers and five co-sponsors introduced Senate Bill 346 last Monday, which would allow property owners to appeal their values at any time, and would require assessment notices to be sent to property owners annually.

The full text of the proposed legislation is available here, and the Atlanta Journal-Constitution has provided these good bullet points summarizing the highlights of the bill:

• Year-round property appeals.
• Making sure that every property receives an annual notice of assessment.
• Statewide uniformity of assessment notices and appeal forms.
• Allowing counties to accept payment plans for property taxes and discounts for early payments.
• Establishing time limits for assessor action in response to appeals.
• Requiring a unanimous vote by Board of Equalization members to increase assessed value.

The bill has already met some resistance, but given the clout of the senators already supporting it, some version of “assessment reform” appears likely to pass during this legislative session.

In other state property tax news, the Department of Revenue has proposed new rules for calculating conservation use assessment values.