Fulton County property tax bills will arrive in mailboxes in coming days amid a swirl of controversy that will make this tax season more memorable than most.
County officials mailed the bills last week even as two lawsuits seek to overturn the 17 percent tax increase approved by the Board of Commissioners in August. If a judge eventually rules the tax increase is illegal, Fulton might have to refund some of what it collects in coming weeks.
Even if it’s legal, the tax hike won’t be popular with many homeowners. The Fulton tax hike, combined with tax increases for other governments and rising property values in some areas, will put a bigger dent in some property owners’ wallets. Just ask Don Horton.
The Roswell resident will pay an extra $400 in county and school taxes this year. And he’s not happy about it.
“I just can’t believe it’s going up as much as it is,” Horton said last week as he got a first look at his 2014 tax bill. “It’s just outrageous.”
Fulton officials say they can’t wait for the litigation to be resolved to begin collecting revenue for the county, cities and schools. They say their own tax hike is needed to pay for popular programs.
“It would be devastating” if a judge rules the tax increase is illegal, said Fulton Finance Director Patrick O’Connor. “We would end the year with not enough money to meet the first payroll in January.”
Horton’s sticker shock and the county’s precarious financial position underscore what’s at stake for everyone with this year’s tax bills.
County resisted increases
Government revenue took a big hit as the Great Recession decimated property values. Many counties responded by raising tax rates, including Cobb (16 percent tax increase), DeKalb (26 percent) and Gwinnett (21 percent) in recent years.
For several years Fulton declined to follow suit, relying instead on reserve funds to balance its budget. But those reserves have dwindled, and the county has struggled to balance its budget. Earlier this year county commissioners cut library hours and reduced spending on Grady Memorial Hospital, senior programs and other services. They also approved a budget that assumed they would raise countywide tax rates for the first time since 1991.
That’s exactly what they did in August. But within a day opponents filed two lawsuits in Fulton County Superior Court seeking to overturn the tax increase, citing a tax cap imposed by the General Assembly last year.
Inspired by a long-standing belief that Fulton County spends too much money, Republican lawmakers passed a law that prohibits the county from raising the tax rate until 2015. Fulton officials say lawmakers overstepped their authority; last summer county commissioners voted to repeal the tax cap, citing their home rule powers under the Georgia Constitution.
The lawsuits say the tax cap is legal. But hearings aren’t scheduled until Sept. 18.
Former state Rep. Ed Lindsey, a plaintiff in one lawsuit, said it would be prudent for the county to set aside money from the tax increase until the litigation is resolved.
“However, the county has an unfortunate long history of ignoring prudent alternatives,” Lindsey said. “That is why we are exploring our options and moving forward with our lawsuit as expeditiously as possible.”
One of the lawsuits asks the court to impound the extra revenue from the tax increase – estimated at $60 million – and place it in a special account. O’Connor said the county doesn’t plan to set the money aside because the money is needed.
“We have no [court] order to do that,” O’Connor said. “The bottom line is, without this millage rate increase going into effect, we’d have very little in cash reserves.”
Horton is worried about his own cash flow. He said his income has fallen in recent years, but his tax bill and other expenses are up.
Last year Horton paid about $4,100 in county, school and state property taxes. This year he’ll pay about $4,500. His Roswell property tax bill, which will arrive later this month, also will probably increase.
Fulton County raised the tax value of Horton’s home from $386,400 to $412,600 this year. The rising value contributed to his higher tax bill, but so did tax rates.
Horton will pay about $212 more in county operating fund taxes, thanks in part to the 17 percent tax increase. He’ll also pay an extra $194 in school taxes in part because the Fulton County School District didn’t lower its tax rate to offset rising property values – in effect, a tax increase.
But Horton is especially unhappy with the county. He thinks Fulton should cut spending instead of raising taxes.
“It doesn’t make sense that they can’t find ways [to cut spending], like every household has to do,” he said.
Not everyone is unhappy. Allen Wolmer of Sandy Springs will pay $181 extra this year in county, city, state and school property taxes. He caught a break on his bill because he appealed his property value last year and got a reduction.
Though he’s not convinced Fulton will spend the extra money wisely, he’s willing to pay more if it means better services.
“We rely on government for a number of things that affect our daily lives,” Wolmer said. “There’s got to be money to pay for that.”
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