Info session scheduled on proposed homestead exemptions

If you would like to learn more about the proposed, expanded property tax exemptions in Decatur, including the school tax exemption for homeowners over the age of 65, a session will be held on October 20 at 6:30 p.m. at the Decatur Recreation Center at 231 Sycamore Street.  This will certainly be the best opportunity to learn more about the proposals before voters consider them on Election Day.  From the October edition of the Decatur Focus:

Decatur's Lifelong Community Advisory Board's Taxation and Affordability Committee is hosting a Third Thursday information session for Decatur residents to learn more about the new homestead exemptions that will come up for vote on the Nov. 8 ballot.  Join them to learn more.

A panel from the City Schools of Decatur and the City of Decatur will answer questions and provide information about these five homestead exemptions.  One of them is an exemption from school property taxes for homeowners over the age of 65--an exemption that expires in five years, when it will be reevaluated.

For more information about the Decatur for a Lifetime initiative or the board, contact Lee Ann Harvey at 678-553-6548 or leeann.harvey@decaturga.com.

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.

Governor signs Decatur homestead exemption bills

Governor Deal signed legislation yesterday that will put five separate questions on November ballots to expand homestead exemptions in Decatur. Deal signed Senate Bill 339, which authorizes a referendum on increasing the basic homestead exemption (known as the GH1) from $20,000 to $25,000. SB 340 allows a vote on increasing the exemption for homeowners over 65 (GH2) from $1,000 to $10,000. SB 342 makes another ballot question that would create a new $15,000 exemption (GH3) for homeowners over 62 with household income under $50,000. SB 341 repeals an old cap on exemption amounts. SB 343 authorizes a vote to create an exemption from school taxes (excluding school bond taxes) for homeowners over 65. Voter approval of these measures would reduce property taxes for eligible homeowners by decreasing the taxable value of their homes. If approved on Nov. 8, 2016, homeowners would become eligible for the homestead exemptions in 2017. The new school exemption would expire in 2021 unless it is renewed.

City Schools of Decatur Homestead Exemption Tabled By Georgia House of Representatives – Your Action Needed

By Linda Harris

On Tuesday, March 8, 2016 four of the five City of Decatur’s homestead tax exemption bills passed the Georgia House of Representatives.  With the previous adoption by the Georgia Senate on February 11, 2016, those four separate pieces of legislation will move forward for the Governor’s signature.  However, SB 343 that provided the most significant tax relief from school taxes to citizens 65 and older has been delayed to a later date upon a motion by Representative Beth Beskin of Fulton County.

Representative Mary Margaret Oliver who represents part of the City of Decatur challenged the motion arguing that Rep. Beskin’s efforts to punish Decatur’s older citizens based on Atlanta’s refusal to grant similar relief to seniors was pure partisan politics.  “I am hopeful we will be able to get over the partisan obstacle created solely by Representative Beskin. I believe the Republican leadership will ultimately be supportive of local control to support the success of the Decatur school system and good management,” said Rep. Oliver.  Rep. Beskin stated to Decatur Mayor Patti Garrett that her motion to table had nothing to do with Decatur or the legislation itself.

“The City of Decatur and the City Schools of Decatur appreciate all of the efforts of Decatur legislators who have worked hard to get these bills passed including Senator Elena Parent and Representatives Mary Margaret Oliver, Howard Mosby, Rahn Mayo and Karla Drenner,” said Mayor Garrett.  “Our delegation members understand the need for property tax relief, particularly for our seniors, and I hope the Republican leadership will also understand our position and consider the merits and value to the citizens of Decatur of the senior homestead tax exemptions.”  The homestead exemption legislation was supported by the Decatur City Commission and the Decatur Board of Education who were acting with the support of the residents of the City of Decatur, including members of the Lifelong Community Advisory Board, a very active group of senior homeowners and the business community.

“It is unsettling that legislation designed by Decatur’s elected officials for the benefit of Decatur’s senior citizens, that would have no impact on anyone other than Decatur residents, has been met with opposition,” said Board of Education Chair Annie Caiola, who added, “We encourage our residents to join us in voicing these sentiments to the Republican leadership. This also happened last year when Decatur’s proposed senior exemptions failed in the eleventh hour due to similar unprecedented maneuvers.  It is our sincere hope that CSD’s homestead exemption legislation will be quickly put back on track to pass.”

To voice your opinion about the City Schools of Decatur homestead exemption, please contact Rep. Beth Beskin (beth.beskin@house.ga.gov); Rep. Jan Tankersley (jan.tankersley@house.ga.gov);  Rep. Jon Burns (jon.burns@house.ga.gov); Rep. Matt Ramsey (matt.ramsey@house.ga.gov);  Speaker of the House David Ralston (david.ralston@house.ga.gov); and, copy Rep. Mary Margaret Oliver (mmo@mmolaw.com).

Make sure they know that SB 343 would provide tax relief to senior property owners and that it is local legislation supported by the City Schools of Decatur, the Decatur City Commission and all of the members of the General Assembly that represent the City of Decatur.

Decatur homestead exemptions: current and proposed

If you are applying for an additional homestead exemption for your home in Decatur for 2016, please note that these are the exemptions the City and school system currently offer:

Current

• GH1—Basic homestead exemption 
• GS1—Exemption for homeowners over 62 with household income under $25,000 
• S1—Exemption if joint income under $10,000 excluding retirement income 
• GH2—Exemption if over age 65 
• S3—Partial school exemption if over 70 
• S2—School exemption if over 80 and federal adjusted gross income is less than $40,000 
• DV—Exemption for disabled veterans 

The additional exemptions that the City and school system have proposed for approval by the Georgia General Assembly and by voters are as follows:

Proposed

1. Expanded GH1 homestead exemption 
2. Expanded GH2 exemption 
3. New exemption for homeowners over 62 with household income under $50,000 
4. New school exemption for homeowners over 65 

These proposed exemptions would have to be approved by voters before going into effect in 2017. You cannot apply for these proposed exemptions yet. These exemptions would expand or be in addition to, not replacements of, the existing homestead exemptions. None of the exemptions listed above (except the disabled veterans’ exemption) would apply to the school bond that was approved last November.

Sen. Parent sponsors 5 homestead exemption bills

State Senator Elena Parent (D-Atlanta) introduced five local legislative bills on Thursday to expand homestead exemptions in Decatur. Senate Bill 339 would increase the basic homestead exemption (known as the GH1) from $20,000 to $25,000. SB 340 would increase the exemption for homeowners over 65 (GH2) from $1,000 to $10,000. SB 342 would create a new $15,000 exemption (GH3) for homeowners over 62 with household income under $50,000. SB 341 would repeal an old cap on exemption amounts. The bills would reduce property taxes for eligible homeowners by decreasing the taxable value of their homes. The bills resemble House Bill 670, 672, and 673 which did not make it out of the House of Representatives during the 2015 session, but city officials and state lawmakers are more confident that the proposed tax relief will be approved this time around.

SB 343 is a new proposal supported by the City Schools of Decatur and the Decatur City Commission that would create an exemption from school taxes (excluding school bond taxes) for homeowners over 65.

If the bills pass the Georgia General Assembly, they would have to be signed by the governor and approved by voters before they would go into effect in 2017. The new school exemption would expire in 2021 unless it is renewed.

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.

City manager proposes fee waiver for senior homeowners

The City Commission will consider a proposal tonight from city manager Peggy Merriss to offer a credit on bills for eligible seniors. Under the proposal, homeowners in Decatur over the age of 70 who have the S-3 homestead exemption may be eligible for a waiver of municipal fees for garbage pick-up and storm water utility services for 2015.

The typical owner of a single-family dwelling in Decatur was charged $240 for sanitation services and $75 for storm water drainage during our 1st installment billing of 2015. Some property owners, such as condo and town home owners, may have been charged less for fees based on the characteristics of their property. The proposal would waive the fees that the property owner was charged, resulting in (assuming that the charges have been paid) a credit on the taxpayer’s 2nd installment bill.

The measure is designed to help seniors cope with the cost of rising property assessments. More information about the context and reasons for this proposal are spelled out in Ms. Merriss’s memo to the City Commission here.  The meeting will take place at 7:30 tonight at City Hall.

Update:  The fee waiver was approved unanimously be the City Commission on Monday night.

Homestead relief proposals in hindsight

Decatur wasn’t the only city to watch its proposals to expand homestead exemptions die in the state House of Representatives this past session. A bill to exempt Atlanta homeowners over the age of 70 from school taxes was defeated a couple days before the session ended. Goes to show that tax relief proposals aren’t always the lead-pipe cinch we thought they were.

Here was the AJC’s report on the Atlanta bill:

A bid to exempt Atlanta seniors from school taxes fails again 

The Georgia House rejected a measure Tuesday that would let Atlanta voters decide whether to exempt many seniors from paying Atlanta Public Schools taxes amid opposition from critics who worry it would undercut the system’s budget. State Rep. Beth Beskin, a Buckhead Republican, said House Bill 633 would help convince older and more affluent residents from bolting to neighboring counties like Cobb and DeKalb that already offer more generous tax exemptions. 

“There’s a reason seniors aren’t moving to the city of Atlanta and they’re not staying here,” said Beskin, a freshman lawmaker. “I know many people, and I’m sure you do too, who move to adjoining counties because the tax burden is onerous.” 

Atlanta already has an exemption for seniors ages 65 and older who earn $25,000 or less annually. Beskin’s bill would broaden the exemption to all seniors once they turn 70. The measure was approved by Atlanta’s local delegation but failed earlier this session in the House. Atlanta schools officials worry the bill would undermine the system’s fiscal health at a tumultuous time, and it failed to earn two-thirds support amid scattered bipartisan opposition. 

But not all property tax relief bills died this year. DeKalb County’s equalized HOST and property value freeze extensions passed the House and Senate. The legislature also passed a homestead exemption measure for the City of Rutledge in Morgan County that is awaiting the governor’s signature.

Stephens County assessor explains "burden shift"

The chief appraiser in a northeast Georgia county recently addressed the concept of "burden shift" brought about by homestead exemptions during a public meeting.  According to the Independent Mail, Christen Collier told Stephens County commissioners:

...Stephens County’s senior homestead exemption, approved by county voters, provides more of a break than the same exemption in other counties because of what Stephens voters approved.

“You have a senior homestead exemption in Banks County, you are going to save $450 off your tax bill,” Collier said. “In Franklin County, you are going to save $250 off your tax bill. In Stephens County, 65 years and over, you are going to save $1,040. That does not go away. It is called burden shift. It is shifting the burden.”

Collier said that burden shift falls onto those who do not have the same exemptions because the county has no other way to replace that revenue.

He used an example of a $100 meal to demonstrate that. If split equally, 10 people pay $10 each for that $100 meal. But with exemptions, some pay more than $10 and some pay less, Collier said. “Three people are going to be exempted from paying the meal,” Collier said. “Two people are going to get a 50 percent reduction, so those two people are going to pay $5. Three people are going to get a 25 percent reduction. They pay $7.50 each.”

That means, he said, the last $75 total must be split among three people which means three people pay $25 for the $10 meal, while three people pay nothing.

Collier said he is not against tax exemptions but wanted to point out their effects on property taxes.

It does sound like younger residents in Stephens County may be paying a larger share of their county's property taxes than their age peers in neighboring counties.  In theory, all local governments determine what services they are going to provide in the coming year, and then the adopt a millage rate necessary to raise the funds to cover the costs of the services.  Knowing what homestead exemptions their residents have, the governing authority would have to increase the overall millage beyond what it would have been were there no homestead exemptions.

However, I think local governments tend to make decisions about the millage rate based on a combination of what is expected politically and by what is financially feasible.  They don't necessarily apply rote, mathematical logic to the millage rate or automatically increase it each time homestead exemptions expand.  Some governments may be willing to "take a loss" by offering more exemptions, and some take a more agressive attitude by restricting exemptions as much as possible.  Also, a local government may be able to keep a millage rate steady even while offering more homestead exemptions if it identifies equivalent savings in the budget.

But Collier's basic point is sound.  Most homestead exemptions in Decatur were the result of approval by voters in a referendum, so voters should have the full picture in mind when deciding whether or not to add more exemptions.  This community has stated its commitment to helping seniors live affordably in their homes, so the possibility of burden creep isn't the only consideration here.

City promotes homestead exemptions

In an effort to help remind homeowners about homestead exemptions based on age or income offered by the City of Decatur, the Revenue Division has sent out this postcard to about 650 residents who we think may be eligible to apply:

If you have previously applied for a homestead exemption, you do not need to re-apply. If you filed for a homestead exemption with DeKalb County, you must also apply with the City of Decatur. You must also apply if you now qualify for an exemption based on age or income for which you did not previously qualify. 

If you reside at the property you own, you may apply for the general homestead exemption online. Applicants for all other exemptions must apply in person at Decatur City Hall, 509 N. McDonough St., Monday-Friday, 8 a.m.-5 p.m.  Please come in as soon as possible.

More information is available at www.decaturga.com/homestead.

Property tax impact on the elderly

A study published last month by the University of Wisconsin examines whether high property taxes force senior citizens out of their homes. Their basic conclusion is that total household expenses, of which taxes one factor, are the more statistically significant indicator. The full article is a little dry, but here’s an excerpt from UW’s news release about the findings:

When pushing for limits on property tax increases, politicians and policymakers often use anecdotal evidence to argue that high or rising property taxes force homeowners, especially the elderly, to sell their homes, according to a study by economist Andrew Reschovsky, a professor in UW-Madison's La Follette School of Public Affairs, and state Department of Revenue economists Rebecca Boldt and Bradley Caruth.

But while property taxes can mean economic hardship for some elderly homeowners who want to stay in their homes, taxes aren't driving them out, the research says.

The study found only a small increase in the probability of moving among older elderly homeowners who experienced large increases in property taxes. In younger households, property taxes had even less of an effect on moving.

Across Wisconsin, only 389 homeowners moved in 2005 because their property taxes grew faster than the median change in property taxes during the previous two years, the study found. Of those 389 homeowners who moved, 85 were older than 79.

"Some homeowners in Wisconsin do face high property taxes relative to their incomes," Reschovsky says. "But most taxpayers who are struggling, even among the elderly, are not picking up and moving because of property taxes. Property taxes are only one part of the cost of living."

However, older elderly homeowners can be more sensitive to large increases in property taxes than younger households, the study shows.

Of all homeowners, one in 1,600 chose to move in 2005 because of an above-average increase in property taxes. But one in 300 older elderly households moved because of larger than average property tax increases.

A final note: the researchers say they used a “rich data set” based on Wisconsin tax records. If you look at the full article, they sure do have a lot of figures and graphs to back up their conclusions, although I wonder if the results would be the same for other states.