Judge to consider Gwinnett tax issue

By PATRICK FOX

The Atlanta Journal-Constitution

A judge will consider Tuesday whether Gwinnett County can tax city residents at a higher rate than those in unincorporated areas to compensate for a disparity in insurance tax revenues.

The county is seeking permission to issue tax notices to residents so that local governments can begin receiving revenues. The notices have been stalled because the county cannot set a tax levy on property until it resolves a service dispute with its 15 cities.

The temporary millage rate the county is requesting in the order, if granted, could mean as much as $74 more in county property taxes on a $200,000 home located in a city, said Lisa Johnsa, assistant county administrator.

The county’s basis for the different rates involves collection of special taxes on life insurance premiums. Unincorporated residents pay those taxes to the county. City residents pay them to the cities.

The county argues this is unfair, because city residents pay less to the county and receive the same services as unincorporated residents. In such cases, state law requires unincorporated residents be reimbursed for the difference, Johnsa said.

“The unincorporated resident has paid the $74, too,” she said. “He just paid it in his insurance premium that the county got. The city resident, while he paid $74 in insurance premium taxes, it went to the city. The county didn’t get any benefit of that revenue.”

County tax notices usually are mailed out by mid-July, and the delay has left many local governments in a bind. Gwinnett school officials have said they may have to draw on their reserves or borrow money if tax revenues are delayed much further.

Gwinnett County’s 2009 millage rate and tax billing have been tangled in the ongoing Service Delivery Strategy dispute with Gwinnett cities. That document establishes which services the county is to provide to cities.

A temporary collection order allows local governments to bill property taxes without an approved tax digest from the state revenue commissioner. The state has not certified Gwinnett’s tax digest primarily because the county has not set a formal millage rate, Johnsa said.

Suwanee Mayor Dave Williams, chairman of the Gwinnett Municipal Association, called the county’s action “very curious.”

“What they’re trying to do is very, very creative,” he said.

Ultimately, Williams said, what is happening is that a judge is deciding the county’s mill rate. In the absence of a new service delivery agreement, he said, the county must honor the old agreement and set the mill rate for all property uniformly.

The county’s proposed millage rate provides taxes collected in 2009 will yield the same revenue as in 2008. Once a final millage rate is set, the 2009 property taxes will be reconciled and taxpayers will receive an adjustment.

The county’s proposed millage rate is 10.94 for taxpayers in unincorporated Gwinnett County and 12.00 for taxpayers in cities.

More than 80 percent of county residents live in unincorporated Gwinnett.