Assessments on Legislature's agenda

By James Salzer

The Atlanta Journal-Constitution

Changing the state’s property tax system will rank high on lawmakers’ priority list when they begin the 2010 session on Monday.

After years of trying to do away with property taxes, or at least limit their growth, legislators are moving this year to make it easier for homeowners to challenge the value county tax appraisers put on their property.

That value is used to determine how much property taxes homeowners owe.

The effort comes after The Atlanta Journal-Constitution reported in a major investigative series that county tax appraisers are setting values on residential properties higher than they sold for.

Senate Majority Leader Chip Rogers (R-Woodstock), a longtime critic of property taxes, is leading the charge to make changes.

“A system based on one human being determining what a property is worth is going to have some problems,” Rogers said. “There are going to be flaws, flaws and serious flaws.”

Property taxes, which are used to fund city and county government and public schools, have been a target of lawmakers for decades. It didn’t matter which party was in charge: Legislators heard complaints from constituents about property taxes and they reacted.

In the 1990s, bids were made to force local government officials to be more open about tax increases and not rely on jacking up property values to raise extra money. Gov. Roy Barnes and a Democrat-led General Assembly approved a state grant program in 1999 to lower homeowners’ property taxes. Lawmakers eliminated that grant this fiscal year because of the state’s fiscal crisis.

More recently, Republican House Speaker Glenn Richardson, who resigned Jan. 1, led a very public but unsuccessful crusade to eliminate property taxes. Gov. Sonny Perdue also tried to eliminate the quarter of a mill in property taxes the state levies each year, but lawmakers didn’t go along with him.

Last year, the General Assembly approved a bill preventing local governments from increasing property assessments for three years. Perdue signed the legislation into law.

Rising property valuations aren’t as big a problem right now because the property bust has dramatically reduced the value of many homes.

However, the AJC found during an eight-month review of sales values and tax appraisals in Cobb, Clayton, DeKalb, Fulton and Gwinnett counties that assessors regularly ignore sales when they fall below tax appraisals. The study found ZIP codes all over the area where median sales fell more than 30 percent but median tax appraisals dipped between 5 percent and 10 percent.

The study found assessors cut $4.2 billion in taxable value last year through adjustments to more than 450,000 parcels. However, the AJC found that if tax appraisals had been lowered as much as sales dictated, the loss would have been nearly $25 billion.

That could have been financially catastrophic for cities, counties and school districts that rely on property taxes.

A study committee led by Rogers has been looking into the issue. Rogers said last week it was likely to be a few weeks before a bill is put together.

However, the bill will almost certainly give property owners more time to appeal the value assessors place on their property.

Lawmakers may scrap property tax returns — the document homeowners file if they wish to contest their tax appraisal — and enable owners to challenge their valuation every year. Currently, if the value of a home doesn’t change and the homeowner doesn’t file a return, he has no right to appeal.

James Roberts, a principal in a Tucker tax consulting firm, suggested to the committee last week that lawmakers require counties to send assessment notices every year, whether a property has been reassessed or not.

Notices could also include estimated taxes, he said. In general, Roberts said, taxpayers should get more information about valuations and how to appeal them.

Rogers said his committee has gotten 20 to 25 suggestions from different groups about how to change the system. Most, he said, aren’t controversial.

Clint Mueller of the Association County Commissioners of Georgia, said his group agrees with about 90 percent of what they expect Rogers to propose.

In fact, Mueller said ACCG has called for similar changes for years.

Mueller said counties support letting homeowners appeal their valuations every year.

“Making the system easier for the taxpayer, making it easier for them to understand, giving them more opportunities to feel they can influence the process, from a county commissioner standpoint, those are all things that are good,” Mueller said.

Counties disagree with Rogers, he said, on how long homeowners should be able to appeal. Waiting until after homeowners receive their tax bills, for instance, would be problematic because by then, county budgets would be set.

If many taxpayers or big corporations got substantial reductions in their assessments, it could ruin a local government’s budget.

“We couldn’t go in and reset the millage rate at that point. We’d have to cut the budget,” he said.

Sen. Steve Thompson (D-Marietta), a member of Rogers’ committee, said lawmakers need to make sure they don’t go overboard. He said local governments that rely on property taxes need to be able to continue delivering services.

“I hope we’re responsible in what we do,” he said.

Rogers said he simply wants to make a bad system better.

“We are looking for anywhere we can find to take the human element out of it,” he said. “There is so much inaccuracy. This is a system based on human evaluations. We need to make it mathematic.

“Fixing it is not going to be easy, but as bad as it is, something has to happen.”