Friday, May 1, 2009

Concerning Property Tax Millage Rates

Public attention is typically focused on the millage rates and assessments local governments use to determine property tax, and rightfully so. On the other hand, however, it can be instructive to delve deeper into the minutia of the matter.

To wit, most folks are complete unaware that there are five tax districts in Athens-Clarke County. They are:

•Urban Services District (the former City of Athens)
•General Services District (the former unincorporated area of Clarke County)
•Downtown Development Authority District
•Bogart (a separate municipality, portions of which are contained within Athens-Clarke County)
•Winterville (a separate municipality, wholly contained within Athens-Clarke County)

Nor do most folks realize the breakdown of to where their property tax dollars go. Assuming that the Unified Government ups its portion of the millage rate as proposed, the distribution of property tax revenue in the Urban Services District and the General Services District will be:

•State of Georgia (0.25 mills) – 0.75%
•Unified Government of Athens Clarke County (13.20 mills) – 39.46%
•Clarke County School District (20.00 mills) – 59.79%

Combined, these total 33.45 mills for the two districts in question. The Downtown Development Authority District incurs an additional 1.0 mills. Bogart and Winterville incur an additional 2.935 and 2.90 mills to fund their respective municipal governments. A chart detailing the various millage rates charged in each of the five districts may be found here.

So now that we have the numbers out of the way, some contrarian observations concerning local millage rates are in order.

The Mayor and Commission routinely tout that they reduced the millage rate twice in recent years. This is true in a technical sense but, as is frequently the case with government at all levels, there is more to the story than just what the politicians claim.

The 0.3 mills reduction in 2004 was due solely to the work of members of the Clarke County Republican Party, who analyzed the budget and presented a list of potential reductions to the folks down at City Hall. To their credit, the Mayor and Commission did adopt many of our recommendations, thereby “freeing up” funds for a millage rate reduction. It should never be forgotten, though, that the original plan was simply to spend the new revenue generated by growth in the tax digest (this last part always seems to get left out of the discussion).

The 0.6 mills reduction in 2005 was a sham, pure and simple. The millage rate reduction was offset by the institution of the stormwater utility fee (even the Unified Government’s budget documents acknowledged this) which, by design, also hit those property owners such as churches and schools who are exempt from property tax. Now, we will have the situation where the millage rate is back to within 0.2 mills of where it was prior to the imposition of the fee – a fee that will be with us forever regardless of future millage rate hikes.

Contrary to the manner in which they repeatedly have been sold to the public, the imposition of SPLOST has been an abject failure in limiting property tax increases. For example, in 2002 when its SPLOST 2 began, the CCSD’s portion of the millage rate was 18.75 mills; it increased to 19.25 mills in 2003, to 19.50 mills in 2004, and to the constitutionally imposed maximum of 20.00 mills in 2005 (and, of course, assessments increased during this period as well).

The SPLOST 3 bonds issued by the CCSD in 2007 included a provision that, should the limited duration sales tax be insufficient to repay the bonds, the balance required would be added to the CCSD’s portion of the millage rate. It took considerable digging on my part, but I eventually found out that, due to case law from way back when, bonded indebtedness does not count against the constitutional 20 mills limit (which, to my mind, renders the limit somewhat specious). And no one can tell me how such a transfer from sales tax to property tax would work – explicitly contrary to the CCSD bond resolution, the Georgia Constitution does not authorize any such transfer.

I will bitch yet again about the CCSD’s 0.25 mills rate increase in 2004. The increase was added to the budget after the legally required public hearings were held on a budget that did not include a millage rate hike – in direct violation of the Taxpayers’ Bill of Rights. As I have explained ad nauseam, the rationale given for allowing this to take place does not even remotely conform to either the Department of Revenue’s regulations or the provisions of O.C.G.A.

Finally, I am to be quoted in an upcoming Banner-Herald article on the CCSD’s budget; I fully suspect that the long knives will come out within a matter of seconds.

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Adrian said...

Thank you for your insight and analysis. These are complex issues, so you do need to put it all together for us.

Anonymous said...

where were you last year w/ACC? I don't recall you and the Republican party showing up with a list of cuts. Budget meetings are starting again tomorrow night, I expect you to show up or shut up.

green eyeshade said...

Where did the idea for funding the storm water fee come from? I know it was a federal law, for example, but believe the counties had choices about how to pay for it. How many governments folded it into the property tax, and how many established a fee? I wonder if there is a way to look at how much revenue is generated and spent in a fee area, vs. a property tax area?

Appreciate the work you've done here and information provided to explain the millage rate. One thing I've never seen, is how much revenue, per year, the property tax brings in; I'd like to look-up this data, say, back to 1985, and look at the governments (ACC, CCSB) income growth per year up until the present. Not an assignment for you, but where can that info. be found?!