The foreclosure crisis has played havoc with metro Atlanta property values, leaving tax assessors with the most difficult year in decades as they’ve tried to set values for 2009.

What’s next?

Local tax commissioners say they expect one difficult year for collections with so many property owners struggling to make ends meet and scores of properties in transition between owners facing foreclosure and banks retaking the property.

“What we think is going to happen is the further we get into the year, the more difficult it will be to collect,” said Robert Goodman, assistant tax commissioner for DeKalb County.

“We expect to see the fallout after Aug. 16. We will then know how many accounts are left unpaid after the first installment is due.” The same issue will be faced across metro Atlanta by both tax collectors and local government officials.

Tax commissioners all say it’s too early to predict what the recession will mean for collections. But everybody expects numbers to fall, some collections to be delayed and lots of tax liens and tax sales.

“We do think this may be a year when we see a drop in collections,” said Paula Martin, business systems manager for the Gwinnett tax commissioner’s office. “In our estimates, it takes about two years for economic change to have impact on collections. We think it may catch up with us this year.”

Any even casual discussion of collections being down — when assessments have already tanked from the real estate crisis — has local government officials nervous as they begin setting revenue estimates and budgets for fiscal years that begin in July and October.

They know that even a tiny drop in collections can mean millions in lost revenue for school systems, counties and cities already forced to cut people and programs to make ends meet. Also, officials say delays in collections could hamper cash flows for some governments.

Both Fulton and DeKalb counties have historically done excellent work in collecting our property taxes in the past,” said Jim Glass, Atlanta’s CFO. “However, for 2010, the impact of the economy with current levels of unemployment and foreclosures will potentially make timely collections of property taxes a potential issue.”

Tax commissioners are the second half of Georgia’s tax system.

Tax assessors set values on property for taxes. The values, addresses and other data they create is used by tax commissioners to bill and collect.

Assessors have struggled during the recession to understand how falling sales prices and rising numbers of foreclosures should affect 2009 assessments. About 50,000 property owners in the five major urban counties have filed property tax returns asking for assessments to drop — on average about 30 percent.

The record number of returns could put so many parcels or so much value in dispute that some counties are forced to seek temporary collection orders. Such orders typically only allow governments to bill at 85 percent of the disputed value until the case is resolved.

Beyond that, properties in transition from private owners to lending institutions can go months before the transfer is recorded and the right bill address found. Some tax officials say they expect lenders to slow payments as long as possible because many of them face financial issues of their own.

All that is being consider now as assessors try to get values set over the next two weeks so they can hand them over to tax commissioners who generally begin sending out bills in July. Most jurisdictions give 60 days to pay.

Fulton County Tax Commissioner Arthur Ferdinand said he and key staff members will take the extra step of making personal phone calls this year to try to nudge delinquent taxpayers with large outstanding bills.

“It certainly can make a difference,” Ferdinand said. “People are normally responsive.”