Our property tax process needs repair

Kyle Wingfield:

Here’s a story that’s far too common in Georgia:

My wife and I bought a house in July. It had been on the market for a while, and foreclosure loomed. Consequently, we got it for 60 percent of what Fulton County says it’s worth.

After improving the house, we had it reappraised. It was still valued at only 80 percent of the county’s estimate.

Unfortunately, that doesn’t necessarily mean we’re in line for a 20 percent property tax cut. When we appeal for a lower valuation, we’ll have every expectation the county’s appraisal will remain much higher than the market will bear.

There are tens of thousands of similar tales in metro Atlanta alone, according to an AJC investigation. (Click here to see metro Atlanta home appraisals using ajc.com.) They are the reason Georgians disproportionately hate property taxes.

It’s not that Georgians pay a crushing amount in property taxes. The nonpartisan Tax Foundation ranks our property tax burden in the middle of the pack nationally.

It’s that, as Senate Majority Leader Chip Rogers (R-Woodstock) puts it, the property tax system “seems to be weighted against the taxpayer in every instance.”

It’s a system, Rogers says, that “has none of the hallmarks of good taxes … it’s not transparent, it’s not easy to understand, it’s not equally applied and people just generally don’t believe that it’s fair.”

Rogers is pushing again this year for property tax reform. It’s among the four or five most important issues the Legislature could address this year.

Rogers’ bill would force county governments to send assessment notices annually, accept appeals year-round and require professional appraisals for some commercial land, among dozens of changes.

Significantly, it also would bar a county assessment for real property from exceeding the price paid for it in the first year after a sale, if no improvements are made.

If it seems like legislators are going beyond improving transparency, that’s because they’ve tried before to tackle property taxes, without lasting success.

Back in 1999, Gov. Roy Barnes got the Legislature to pass a bill requiring county governments to advertise higher assessments as tax increases unless they rolled back the millage rate to keep levies level. The idea was to prevent backdoor tax increases due to rising property values.

Yet, because counties don’t have to send assessment notices to homeowners annually, too few homeowners recognized that their taxes were rising before it was too late.

Former Speaker Glenn Richardson’s biggest legislative failure may have been his doomed plan in 2008 to eliminate property taxes altogether and replace the revenue by broadening the sales tax.

So far, county governments are showing few signs that they’ll try to sink the bill, only that they want to tweak it.

For instance, the Association County Commissioners of Georgia argues persuasively that allowing year-round appeals could wreak havoc on county budgeting processes because the tax digest would be perpetually unsettled.

A better option, the ACCG’s Clint Mueller said, would be to allow homeowners to file appeals year-round — rather than the overly narrow 30- or 45-day periods used today — but set a deadline for appeals to take effect in the current tax year.

That might delay the use of a new sales price by a year, but buyers would know that going into a deal. And they would gain certainty about the new valuation going forward.

In a falling market, using new sales prices will mean savings for most taxpayers. In a rising market, however, it could mean a higher levy.

But the point is not to lower taxes as much as it is to fix the process. On that basis, Rogers’ approach fits the bill.   

  

 

Posted via email from Jim Nichols for GA State House