Columbus voters keep property taxes frozen

One of the bigger property tax-related proposals on the ballot in Georgia this year was a repeal of the property assessment freeze in Columbus. Opponents of the freeze, including the Muscogee County school board and Columbus mayor Teresa Tomlinson, said that the freeze suppresses economic activity by discouraging home improvements and property sales. However, in the end, people weren't sold by the argument and chose to keep the freeze. Sixty percent of residents voted against a "thaw."

This is the third time that a repeal of the Columbus freeze has been defeated. It goes to show that a permanent freeze is difficult to tweak even if there are valid reasons to alter it. It also probably helps explain why DeKalb County's property tax freezes sunset every few years instead of being permanent. From the Columbus Ledger-Enquirer:

...If the referendum had passed, it would have kept the freeze in place for all who are currently under it, but would have put any homestead property bought after Jan. 1, 2017, under a more traditional fair market value system, where property is regularly reassessed. Those properties under the freeze would have remained so until they changed hands, whether by sale or probate. They would have then go into the fair market value system. Eventually, all frozen property would have changed hands and no property would have remained under the freeze.

The property tax assessment freeze was voted into effect in 1982. It freezes the assessed value of a homestead property at the value at the time of the sale and keeps it there until the property changes hands. It is then reassessed at the current value and again frozen at that value.

It has been challenged before, both at the polls and in the courts, and the challenges failed both times.

Voters initially approved the freeze by a 73-27 percent margin in 1982. A 1991 attempt to repeal the freeze by referendum failed by an 81-19 percent margin.

In the early 2000s, a group challenged the freeze’s constitutionality and won a favorable ruling at the Superior Court level. But the state and then federal supreme courts ruled it constitutional...

Legislators intend to fix the equalized HOST

In 2015, the General Assembly passed House Bill 215, which authorized a vote in 2016 for a new, "equalized" homestead option sales tax (HOST) and special purpose local option sales tax (SPLOST) that would alter the formula for a local sales tax for infrastructure improvements and property tax credit offsets. The legislature also approved HB 596, authorized a vote to extend the existing property tax "freeze," which locks in homeowner values for the purposes of county tax billing. HB 215 included language that said the freeze would be suspended if an equalized HOST were in effect. Realizing that this would increase homeowners' tax bills, officials have decided not to put the sales tax measure on the ballot. HB 596 will appear on November ballots as regularly scheduled to extend the freeze.

Members of the DeKalb legislative delegation is saying that they will work quickly in the 2017 session to correct HB 215 for a vote. Crossroads News has the details on the legislators' plans:

DeKalb delegation to change law hampering county SPLOST

The DeKalb delegation to the Georgia General Assembly is preparing to fix a state law that derailed a DeKalb County government Special Purpose Local Option Sales Tax in July.

The DeKalb Board of Commissioners was preparing to vote to place a 1 percent sales tax referendum on the Nov. 8 ballot to fund road paving and other infrastructure improvements when it discovered that House Bill 596 would have eliminated property tax relief for homeowners.

The SPLOST would have generated $551 million over five years with $377.7 million going to the county and the rest to the cities.

Now commissioners like Larry Johnson, who represents District 3 and is the BOC’s presiding officer, are pushing for the law to be amended. Johnson said more than $200 million will be spent in South DeKalb if voters approve the SPLOST.

“That is money that will fix our roads and improve our parks and libraries,” he said. “We need that money to make improvements.”

State Sen. Emanuel Jones, who attended a Sept. 20 SPLOST update meeting hosted by Johnson, said he is working to change the law in the early weeks of the 2017 legislative session so that the referendum can be on the March 2017 ballot. “It’s an accelerated time line but we can do it,” Jones told the meeting...

Wrap-up on Georgia tax legislation, 2016

In addition to Decatur’s homestead exemptions (see prior coverage here) and personal property tax exemption for fulfillment centers (see here), Governor Deal signed at least a half dozen other tax-related bills into law last week.

By signing House Bill 1104, the governor authorized a vote in Columbus-Muscogee County on eliminating the property tax freeze that Columbus has had in place since 1982. The freeze had become controversial locally and the mayor there campaigned against the freeze saying that it slowed economic growth.

The governor also signed HB 937 granting a sales tax break for the new Falcons stadium and other projects of "competitive regional significance," Senate Bill 369 authorizing sales tax increases for transportation improvements in Atlanta and Fulton County subject to voter approval, HB 991 waiving penalties and interest for military taxpayers who became delinquent while deployed, HB 987 amending conservation use covenants for ad valorem taxes, HB 769 exempting boats and all-terrain vehicles in dealer inventory from personal property taxes, and HB 960 making several changes to taxes administered by the state including the interest rate on past due state income taxes.

Columbus mayor says property tax freeze hurts seniors

Columbus mayor Teresa Tomlinson has been arguing against Columbus-Muscogee's property tax freeze for several years.  Their freeze basically locks the property value in place until the property is improved or sold.  Mayor Tomlinson says their freeze suppresses economic activity by discouraging home improvements and property sales.  New buyers are priced out of the market because the freeze shifts the overall tax burden from sellers to buyers.  Rather than protecting seniors on fixed incomes, Mayor Tomlinson argues that Columbus's freeze actually traps them.  If a senior attempts to downsize, they would lose money on their next home because they'd be subsidizing longtime freeze recipients.  Tomlinson says that it takes at least 14 years to begin benefiting from the freeze, and closer to 30 years until the freeze makes the taxpayer whole.  The average family moves every seven years, so she argues that most Columbus homeowners never benefit from the freeze.  She made her latest pitch during an interesting interview with WLTZ which you can view here.

The Georgia General Assembly has authorized a local referendum in November for Columbus to vote on whether to end the freeze.

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.

Columbus mayor pushes to end property value freeze

The mayor of Georgia's second biggest city is urging residents to support an elimination of a property value freeze instituted in Columbus 35 years ago.  Taxpayers with the freeze keep the same property value for tax purposes unless they make improvements or sell the property.  Teresa Tomlinson argues that the system is unfair and discourages homeowners from making improvements and new families from moving in.  WRBL reports:

Columbus Mayor hopes City Council backs ‘thaw’ of property tax freeze 

COLUMBUS, Ga. – Mayor Teresa Tomlinson has wrapped up her “Thaw the Freeze” public forums. Tomlinson is hoping to add a referendum to the November 2016 General Election ballot.

Her proposal is to “thaw” the city’s property tax freeze that has been on the books since 1982. In basic terms, the freeze means when you buy a house in Columbus, your home value is frozen from that day on. 

Mayor Tomlinson said it’s had a depressing effect on the city’s economy. “With those types of findings, we need to take a very serious look at what sort of community we want to be in the future,” Tomlinson said. “Do we want to have a tax system in our community which deters people from moving in, penalizes people from moving up or down-sizing?”

This was the catalyst in her decision to host the public forums — to see how they community feels about what she calls an “outdated” tax system. 

Those that are most opposed to it are those who created the original tax freeze,” the mayor said. “And I think some of that is obviously because they felt like they did something tremendous at the time. And I think it was tremendous…at the time.” 

As the housing needs of society have changed, so should the tax system, the Mayor would argue... 

But changing a system that’s over 30 years old, won’t be easy, as the City Council has done battle with this issue before. 

“A lot of the council has been through the wars of the past and I’m sure they’re very apprehensive about teeing this up again because it’s been so divisive in the past,” Tomlinson said. “And I hope they will allow the citizens the opportunity to direct our future.” 

Meanwhile, opponents said this jeopardizes their security and they fear a ripple effect on other taxes may come from this change. 

As for next steps, the City Council would have to request that the referendum be put on the November ballot. The Georgia State Legislature would also have to approve it...

DeKalb County also offers a property tax freeze, but the freeze here seems to enjoy much broader and bipartisan support than the freeze in Columbus-Muscogee.

Equalized HOST and value freeze bills sent to Governor

Two bills supported by most state legislators representing DeKalb County were passed by both houses of the Georgia General Assembly and have been sent to Gov. Deal’s desk for his consideration.

House Bill 215 provides for an “equalized” homestead option sales tax (HOST) and an additional 1 percent sales tax in DeKalb County if approved by voters. The proceeds from the new tax would go toward infrastructure improvements in DeKalb County. The existing HOST credit would be modified to provide some more property tax relief. The equalized HOST could save Decatur residents about $20 a year compared to their last DeKalb County tax bill. HB 215 passed the state Senate unanimously, but received 32 nay votes in the House from fiscally conservative Republicans who regarded the measure as a tax increase.

HB 596 provides for an extension of the property assessment freeze in DeKalb County until 2021. The freeze is actually an exemption that offsets increases in property values for homeowners countywide. For Decatur residents, the freeze can help prevent increases in your DeKalb County tax bill but not your City of Decatur tax bill. HB 596 passed by a wider margin than HB 215. There were only four dissenting votes, which were cast by Democrats in the Senate including Sen. Gloria Butler of Stone Mountain and Sen. Steve Henson of Tucker.

Meanwhile, three bills to expand property tax relief for Decatur homeowners died in the state House before the session ended. HB 673 would have increased the existing GH1 basic homestead exemption by exempting $25,000 in assessed value rather than the current $20,000, which would have saved approximately $60 on resident homeowners’ tax bills when compared to current bills assuming no change in property value or in the millage rates. HB 670 would have added a new “GH3” exemption for homeowners over 62 with household income under $50,000 that would have saved them about $175 per year. Section 2A of HB 672 would have would have increased the existing GH2 (age 65) exemption amount of $1,000 to $10,000, which would be a savings of an additional $100 per eligible taxpayer.

Proposal to extend property value freeze advances

The Georgia House of Representatives approved HB 596 yesterday which allows for a referendum to extend the property tax freeze in DeKalb County up through 2021. The bill now heads to the state Senate where Sen. Fran Millar says he’s already been promised support for the measure by fellow DeKalb legislators.

The freeze doesn’t actually prevent property values from increasing, but it offsets increases in property values by exempting the value by which the property has increased. The freeze applies to county property taxes. Homeowners can apply for the freeze when they apply for their DeKalb County homestead exemption. The DeKalb freeze can save taxpayers money even if they live within the city limits of Decatur by potentially reducing their county property tax bill.

Bills to watch in 2015

The Georgia General Assembly convenes today. Here’s a look at some of the proposals at the Gold Dome that could affect taxes locally or statewide if enacted:

• Expansion of homestead exemptions in Decatur. The Decatur City Commission approved a proposal late last year to expand two existing homestead exemptions and add a new one. The next step would be for the General Assembly to pass it before a referendum that would take place later this year. 
• DeKalb property tax freeze. Both Rep. Mike Jacobs (R-Brookhaven) and state Sen. Fran Millar (R-North DeKalb) said during their 2014 reelection campaigns that they intend to renew the real property tax freeze in DeKalb. The freeze reduces county tax bills for all DeKalb's homeowners by offsetting increases in their assessed value (even for homeowners in Decatur), but does not affect your city taxes. 
• Decatur's proposed annexation. The Decatur City Commission has approved an annexation proposal in December and is looking for a legislative sponsor.  This would affect the property taxes of currently unincorporated residents if approved by the legislature and then by voters in a referendum later this year.
• Property assessment reform.  During his reelection campaign, Sen. Millar promised "to enact true property tax assessment reform" during the 2015 session that would affect assessments statewide.  We may see a reintroduction of a bill along the lines of SB 293 that Millar proposed last year. 
• Tax lien changes.  Newly elected state Rep. Beth Beskin (R-Buckhead) has proposed requiring certified notice before selling a property tax lien. Neither Decatur nor DeKalb sells liens, but the proposal would affect Fulton County which routinely transfers liens.
• PILOT assessment reform.  A special study committee met during the legislative break to review payments-in-lieu-of-tax agreements and their affect on school funding. While they focused on administrative changes rather than new legislation, there could be some proposals stemming from the committee's hearings to provide for greater involvement and notification by tax assessors of PILOT values to school boards for budgeting purposes.
• Tax credit changes.  There has been some discussion during the legislative break about changes to state tax credits (possibly including a reduction in the number of credits available but a continuation or even an expansion of the state entertainment/film tax credit).  There have also been two pre-filed bills that would affect state income taxes. HB 20 would extend the state income tax credit for low-income housing to any owner who owned it even for part of the tax year, and HB 35 would increase the amount of qualified education tax credits available.

State rep says DeKalb tax freeze is his top priority for 2015

Rep. Mike Jacobs (R-Brookhaven) says his top priority in 2015 will be making the property tax assessment freeze in DeKalb County available to homeowners permanently. Rep. Jacobs is running unopposed for reelection to the Georgia House of Representatives.

The League of Women Voters of Georgia asked candidates for office, “If elected, what would be your top three priorities and how would you work to achieve results?” Jacobs answered:

First, I helped pass a ten-year property tax assessment freeze in DeKalb County which will expire in 2016. I sponsored legislation this year to make this assessment freeze a permanent measure. The legislation passed the State House, but failed to gain sufficient support from the DeKalb members of the State Senate. I intend to try again in the 2015 legislative session…

The freeze does not affect City of Decatur property tax bills, City revenues, or Decatur school system revenues.  But the freeze does affect the DeKalb County bill that Decatur property owners receive and their overall property tax liability. The amount of savings from the freeze varies based on how much the property value has changed since it was frozen. Technically, the freeze doesn’t change assessed values (which must be calculated according to standard appraisal methodology per state law) but rather offsets increases in property values by reducing DeKalb taxes billed.