Are You Ready for Higher Taxes?
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Gwinnett County officials have revealed the proposed final 2009 budget, which replaces the interim budget adopted at the beginning of the year to satisfy statutory requirements. Despite $40 million in cuts to various programs, the budget remains underfunded by at least $62 million.
You and I still have some research to do and we can still influence the outcome, but time is of the essence. The budget will be approved on March 3.
There is plenty of data available online and I have requested specific information from the county to help me firm up the calculations presented in this article. The bottom line, at this point, is that Gwinnett property owners face a substantial hike in their tax bills this year; and this may be just the first of several millage rate increases to come.
Higher Taxes a Certainty
- That the county has a budget shortfall of $62 million (GDP reported $65m) and that county officials will be unable to substantially reduce that deficit;
- That the Commission will choose to satisfy the entire deficit with a tax increase, honoring their published promise not to tap reserves;
- That the 2009 Net Tax Digest (the value of all taxable property in the county) will remain stable compared to last year, or increase only slightly.
My calculation is probably off just a little, but Gwinnett taxpayers are definitely in for a shock. Most people do not know how good they have had it… tax bills subsidized by growth; tax rates held artificially low for political reasons; daily operating expenses paid out of “pre-collected taxes” (the reserve); etc.
More Cuts Needed?
County officials have touted over $40 million in spending cuts, but that’s less than five percent of Chairman Charles Bannister’s proposed budget of $919.2 million (Maintenance & Operations). And with some additional spending added, the M&O budget to be approved next week comes in at $901.9 million, a net cut of less than $18 million.
A substantial amount of savings will come from job vacancies that will not be filled or larger capital expenditures that will be deferred– a $3 million replacement police helicopter; Juvenile Court expansion ($1 million); the renovation of a public building ($880K); and others.
Dozens of smaller expenses have been trimmed– an adult softball program ($3,740); field marking paint for an athletic association ($19K); “Movie Under the Stars” ($3,195); and “Gwinnett Glows” ($69,302); to name a few. The county will save $175,000 by turning off the underpass lights on I-85 and Sugarloaf Parkway.
A number of non-profits and quasi-governmental entities will receive only slight cuts to their government subsidies. The following groups are having their handouts cut by only 10%– Board of Health, Children Shelter, Council for Seniors, DFACS, Indigent Medical Care ($50K), Latin American Association and Mental Health. The Human Services Coalition is losing 5% ($2,899); the Partnership Gwinnett subsidy is being cut by 50% ($250K); and Metro Atlanta United Way’s funding ($30K) has been completely eliminated.
You will find a complete list of the proposed expenditure cuts here.
Spending `Pork`, Gwinnett Style
What truly confuses me are some of the items (totaling $18.9 million) that are apparently being added to the final budget:
- $250K for a light rail study;
- $265K for a “privatizing jail operations” study;
- $350K for an efficiency review of judicial operations;
- $500K for GPS in county vehicles;
- $1.06 million for the “Go Green Initiative”;
- $75K to the Sports Council;
- $100K to the Mall of Georgia CID;
- $5,578 for new pavilions at Alexander Park;
- $150K for economic development studies;
- Approx. $170K for new parks and improvements to existing;
- $929K for software licenses;
- $300K for a tennis center;
- $13,715 in “additional temporary monies”
The bulk of the remainder is going to fund personnel and equipment for police and fire services.
The wiser choice would be to defer most of the non-public safety add-ons as well. Eliminating most of the items listed above would produce a 1/10-mill reduction in the expected tax hike. Deeper cuts to the payouts to non-profits could produce another 1/2-mill reduction.
What This Means to Your Tax Bill
A 2.06-mill (approx. 21%) increase in the tax rate will result in a substantial impact on your tax bill. The owner of a $200,000 (assessed value) home will pay approximately $144 more in county property taxes this year. The owner of a $2 million commercial property will pay over $1,600 more.
Other Considerations
HB-233, currently pending a vote in the State Senate, would “freeze” assessed values at last year’s level for the next two years. The assessment cap (which was supported by every Gwinnett Republican House Representative and opposed by every Democrat House Rep.) will artificially depress the growth in the Net Tax Digest, on which cities and counties rely to help fund increases in costs.
The passage of HB-233 (and it seems certain) will result in a higher tax bill for you. Even though the county is expecting minimal growth in the Tax Digest (approximately 1%), even that small increase would have allowed the county to reduce the tax increase by .02 mills. Instead, the owner of a $200,000 home will pay $22 more if HB-233 passes. Because the digest depression is cumulative, HB-233 will cost you even more in 2010.
In case you’re wondering why your Republican representatives in the State House would support a bill that will actually increase your tax bill, they are being told that HB-233 will protect you from tax increases… and they haven’t bothered to investigate for themselves.
What You Can Do
A property tax increase is unavoidable. Our goal at this point must be to minimize the damage. Here is what you can do to help:
- Contact your County Commission via email here. Insist that they abandon the additional non-public safety expenditures. Ask them to cut subsidies to non-profits by at least 25%. Tell them that you are willing to do your part in tough economic times, but that you will not accept more than a 1-mill increase (which would require cutting the anticipated deficit by an additional $32 million).
- Contact your Gwinnett State Senators via email here. On tomorrow, Thursday, February 26, the Senate is expected to vote to approve HB-233. Tell the Senators something similar to the following:
Senator, I am a homeowner and voter in Gwinnett. I have learned via TalkGwinnett.com that HB-233 may result in a higher tax increase in Gwinnett than is being estimated this year, if it passes. The increase in my tax bill may be 15% more solely because of HB-233 and even worse next year. I do not like that my property tax bill will increase at all. I certainly do not want to learn that your support of HB-233 resulted in an even higher tax bill! Vote NO on HB-233.
Finally, register for a free TalkGwinnett.com member account and post your comments below. Look for the “Register” link to the right.
UPDATE 2/26 2:15 pm: The Senate has passed an amended version of HB-233. The changes will probably have to be reconciled with the House version, but the vote puts the bill one step closer to passage.
It appears that almost every Gwinnett Senator, both Republican and Democrat, voted FOR this bill. That is extremely unfortunate, as my article explains.
Soon, I will publish a list of the Senators who voted to increase your tax bill. In a couple of days, I will also have a better idea of just how much their action will cost you.
[...] Are You Ready for Higher Taxes? | TalkGwinnett.com [...]
Property taxes are increasing although our appraisals are decreasing. In these times when our homes are worth less, much less, the county feels my property value increased. Not by a couple thousand but by about $60,000. Well the appraisal we got on the house went down to $95,500. If you dispute your appraisal you can get a Taxpayer’s Return of Real Property to file. Keep in mind you must have an appraisal to get them to reduce what THEY think the house is worth.
I can’t take anymore taxes. We have faced layoff’s in this house and the politicans who not only have a job but are not having to clean out their savings to keep their homes, must realize Gwinnett homeowners are in trouble. We need to find new jobs, stop giving tax breaks to these corporations who come to Gwinnett, stop building Braves stadiums that the average Joe can’t afford. We are a wasteful county and it needs to stop.
If we the citizens are tightening our belts, the county must learn to do the same and not expect the homeowners of Gwinnett to make up the differences in their budgets. We, the homeowners, are the stable force in Gwinnett. We live here, do business here, go to schools here and so much more.
[...] Are-you-ready-for-higher-taxes [...]
[...] Gwinnett, both Republican and Democrat, voted FOR this bill. That is extremely unfortunate, as this article at TalkGwinnett.com [...]
[...] Gwinnett, both Republican and Democrat, voted FOR this bill. That is extremely unfortunate, as this article at TalkGwinnett.com [...]
Tina,
I can’t take higher taxes either – especially when our county services seem to continue to worsen. But even more disturbing is when elected officials don’t think they have to pay THEIR taxes.
Read my upcoming blog post on Lilburn City Councilman’s fraudelent homestead exemption he carried for years until he was exposed….
Investigation leads to tax woes for Lilburn City Councilman Eddie Price
An investigation into property held by Lilburn City Councilman’s Eddie Price has resulted in a tax bill off over $1,700 being issued for Price illegally claiming a homestead exemption on rental property he owns.
Those elected to government positions must serve as a role model in paying ALL the taxes that they are required to pay. It is disingenuous for a person of Price’s political stature to run on keeping proprty owners taxes low while in fact he is claiming exemptions he is not entitled to.
Councilman Price chose to involve himself in my dog barking case which ultimately opened up his involvement of the skimming off of tax revenue he was participating in. Those who cast stones shopuld be careful idf they live in glass houses. This issue will certainly surface during future discussions with the city of Lilburn’s attempt at annexing a large part of un incorporated Gwinnett.
One is left to wonder what role Price played in the county solicitor’s position that “my” neighborhood would be better served if I surrendered upwards of ten of my dogs or MOVED to resolve my barking dog issue. Was Price interested in justice and tranquility or merely seeking the opportunity to purchase my property in a distress sale? The integrity of any political figure who seeks to kill old lazy hounds should be an issue for all of us who cherish our family pets.
Whether or not the county is facing a larger issue of other real estate predators manipulating the property tax code is an issue that needs to be addressed by the county attorney’s and commissioner’s office before arbitrarily increasing taxes on those of us who pay our fair share already.
For a county that criminalizes property owners who own a dog that barks can I suggest our efforts in building a “better” Gwinnett would be better served by enforcing our tax codes instead?
If I remember correctly homes are appraised every three years so doesn’t that mean the assessment stays frozen for three years. So what exactly is HB-233 offering if they freeze my assessment for two years? In Gwinnett’s case some taxpayers beenfit more than others depending on the date of your last appraisal. Definitely not fair.
Also didn’t we vote to freeze our county taxes based on what our assessment was at that time. So again what does this bill do for for us in Gwinnett?
I’m more annoyed at the BoC although some of the guilty parties are long gone from office. For over a decade starting under Wayne Hill the county kept cutting the millage rate and at some point this was going to happen because the reserve account didn’t grow enough to shelter the budget during lean times such as we are encountering now. With better planning instead of political posturing we would have been in better shape to handle the economic downturn without having to raise taxes back up.
I don’t know for sure, but I have always understood that Gwinnett assessed on a three-year rotation. You are right; there will be property owners for whom HB-233 provides a temporary benefit while others receive no benefit. I assume that, after the assessment cap expires that property will again be valued at Fair Market Value.
I had actually forgotten about the Value Offset Exemption, which is a floating exemption that increases by the same dollar amount that your assessed value increases. The VOE is only beneficial to homestead, while HB-233 freezes the assessments of non-homestead as well as non-residential.
Also, the VOE only applies to county taxes while HB-233 will cap assessments for not only county taxes but city and school taxes as well.
Yes, the Commission screwed up by rolling back the rate even when it produced a deficit. You may recall that I did an analysis of the millage rates of all Gwinnett jurisdictions in 2005. While I found that most cities OVERtaxed via an arbitrarily-inflated millage rate, the county and the school board actually UNDER-taxed. I have looked at only one year since 2005, but the county undertaxed in that year, also.
It is my opinion that it is just as irresponsible for the county to undertax (create debt) as it would be for it to overtax.
Finally, you might be interested in the history of HB-233. When Rep. Edward Lindsey first submitted it, it had nothing to do with an assessment cap. It modified a definition related to conservation use property. Lindsey also submitted HR-1, which was a constitutional amendment to impose a permanent, three-percent assessment cap.
The Democrats resisted HR-1. Because the proposed constitutional amendment required a “super-majority” to pass, the Republicans were unable to push it through.
So Lindsey, in committee, completely changed the subject– he rewrote HB-233 to impose a temporary three-, then ZERO-percent assessment cap. The entire purpose was to threaten Democrats and “encourage” them to support HR-1. If the Dems continued to oppose HR-1, the Republicans would proceed with the NEW HB-233 which, as a regular bill could pass with a simple majority.
The Dems held firm. As soon as HR-1 failed to receive a super-majority on its second try, Lindsey and House leadership presented HB-233, which passed.
Majority Leader Chip Rogers presented the bill in the Senate and it passed without question after it was amended in committee so that it didn’t apply to a couple of counties that had just, or were about to complete a county-wide revaluation.
HB-233, if it is enacted, will hopefully be challenged. It won’t withstand a challenge on constitutionality because it creates a privileged class of taxpayer, and that can only be done by constitutional amendment.
The Republicans’ conduct during the progress of this bill was despicable…. especially since an assessment cap can easily be shown to be ineffective and harmful.
For 100% EFFECTIVE property tax reform, visit http://www.millagerate.com. To read more about the dangers of assessment caps, visit http://www.millagerate.com/blog/
I am amazed that the county has come to this, but then I am not. First, the county has long planned their budget based on expected growth in property tax revenues. The enticement is to attract new residents with the school system. Yet, the combination of $11,650 per pupil per year school cost (based on content in the 2009 K12 county budget) and the Do No Ask policy had led to a mismanagement of county finances that can easily be estimated into the $80-100 Million range.
Compare the school system demographics between the Atlanta and Gwinnett school systems between 1990 and 2005. The demographic component of interest (let’s call it DCI) shows a start difference between Atlanta’s Ask policy and Gwinnett’s Do Not Ask policy.
The DCI remained almost unchanged for Atlanta’s school system for the DCI, but had a +20 fold increase in Gwinnett’s school system. If one conservatively estimates the representation by the illegal population within the DCI as being only one-in-five (20%) and apply this against the 2009 budget student population (DCI is 30,050 students in Gwinnett’s K12) the amount is approximately $70 Million.
And let’s not forget about the costs of burden the illegal representation of DCI is on other county systems such as the Sheriff’s department, the medical system, etc., and thence look at who is employing their household heads via a tax evasive operations.
Gwinnett county needs to do the right thing and not financially support the illegal portion of DCI. Look to your neighbors, friends, and businesses conducting their business in questionable manners.
I have a question -
I just pulled down the 2008 budget and noticed that the Operating budget was $855.8 Million and the Capital budget was $676.3 Million for a grand total of around $1.5 Billion. If you look at their little budget presentation for 2009 you see a total budget of $1.67 Billion made up of an operating budget of $901.9 Million and $770 Million in Capital projects. Where did they make the cuts? It seems to me that they are proposing an INCREASE in spending over last year!
Very astute David! Obviously you are not employed by the County or you would have your “County blinders” on. It is an old trick of the trade for politicians to hide behind the math as if we can’t add 2 and 2 and get 4!
So after the $5.20 additional increase on everyones water bill the net impact from homeowners should be $4.5 million) based on 50% of homes of the 180k that the BOC used for their trash figures. This gives all others the assumption thay are on wells and septic.
So I wonder how much revenue will come in from businesses?
So lets assume that the milleage rate will increase everyones taxes by $100 per year,using the same 180k houses that will generate another $18 million. How quuickly the shortfall gap will close before even figuring in comercial assesments.
Higher property taxes? What a surprise! I don’t know about Bannister’s supporters but the rest of us who did not vote for him knew this day would come.
I think they should go back to the drawing board and start again this time try to manage the money as if it were their own! Obviously had this budget been leaked to the press Chairman Bannister would have been run out of office instead of riding in on his Trojan horse.
When I make my budget if it doesn’t balance (which the County’s hasn’t for the entire time Bannister has been in office) I cut things, things I can’t afford, think the Board of Commissioners ever heard of this? I know it is a new concept for them so I’ll be
patient while they get informed. I know there are more items in the 2009 budget that can be streamlined or omitted entirely in order to keep property taxes down, maybe they could look at some of the fat in the budget and trim it a bit, huh? I do it, I manage my money and I am very *frugal with my funds! For those on the Commission Board and our deep pocketed, big headed Chairman who have probably never heard of this word I am happy to provide them with it’s meaning and maybe they could add it to their own vocabulary;
*fru-gal 1. not wasteful; not spending freely or unnecessarily; saving; economical 2. not costly or luxurious; inexpensive. b. sparingly provided.
What a concept, huh? Gotta love it!
[...] and that is going to hit you right in your wallet. Bob Griggs at TalkGwinnett.com has posted an in-depth budget analysis and concludes that an increase of 2.06 mills will be necessary. This translates into $144 more in [...]
[...] Are You Ready for Higher Taxes? [...]
[...] budget included token reductions in numerous handouts to community non-profits, but almost $19 million in additional spending. The additional “pork” included $1.06 million for the “Go Green [...]
[...] Finally, the Bannister administration must rethink its spending. I am confident that Gwinnett taxpayers facing a three-mill tax increase this year would rather Bannister spend their tax dollars on law enforcement than on a light rail study, GPS in county vehicles, a “Go Green Initiative” and a tennis center. [Source] [...]