Perkins-Hooker said the county needs to show it has an urgent need for tax dollars, "which we obviously have." She has to be optimistic — if the county fails to convince the judge, the consequences for local governments and school systems would be dire.
Without the temporary collection order, the county government might have to furlough or terminate employees, and could default on a $200 million loan that is due Dec. 29. Fulton County schools have already said they plan to delay a late-December paycheck, to help with cash-flow issues, and the district announced a hiring freeze, spending cuts and a moratorium on field trips. And Atlanta Public Schools is considering employee furloughs, and how to manage its own $100 million loan.
"If you don't pay by the end of the year, you default," said Dwight Robinson, Fulton's chief appraiser. "The schools are telling folks what's going to happen if they don't get the money in. All those things are real."
The court hearing is the latest step in a process that has began this spring, when residents first got word that their property values were skyrocketing. The median value increase in the county was 13 percent, but nearly a quarter of homeowners in the county received assessments that were up 50 percent or more.
Half of the county’s nearly 320,000 parcels saw assessments that were at least 20 percent higher. Robinson said his predecessor had failed to keep up with rising values as the county’s housing market improved following the recession, and his job required he correct the discrepancies.
Instead of decreasing tax rates to offer some relief, county commissioners decided to freeze most residential properties at the artificially low 2016 levels, relying on a law from the 1880s to take control of a process that is normally driven by the Board of Assessors. The decision delayed tax bills while the new values were calculated.
Then, the county was prevented from sending tax bills — which have normally been paid by now — by the state. The Department of Revenue last week rejected the county's tax digest, and questioned the legality of the decision to freeze values and the county's move to tell residents who had already appealed their increases that their appeals were no longer relevant.
In court, the county will ask Harvey for permission to send those tax bills, with values that in most cases are the same as 2016. Harvey has the flexibility to allow that, or to order the county collect some percentage of what they’re asking.
This is the first time the Department of Revenue has rejected a county’s tax digest since Wayne County’s in 2014. No one there or at the Department of Revenue returned phone calls seeking comment about why the digest, which is an accounting of all property and real estate in the county, was rejected.
It’s not the first time Fulton has had to ask for a temporary collection order. The last time was in 2010, when value decreases because of the recession caused a large percentage of property owners to appeal their values, forcing the county to get a court order to collect taxes.
If Harvey approves the county’s request, Perkins-Hooker said, bills could be sent by Nov. 15. They would be due Dec. 31 in Atlanta, and Jan. 15 in the rest of the county. Perkins-Hooker said the county no longer planned to ask the judge to shorten the due date outside of Atlanta because there is not enough time to create tax bills with a new date.
Robinson said he thinks people are ready to pay.
“There’s a significant portion of residents of Fulton who want to pay their taxes,” he said. “For various reasons, most people will pay their taxes on or before Dec. 31. The hope is if tax bills can go out on or before the 15th of November, all the stakeholders will have enough money to pay their current obligations.”
No matter what happens in court, the county will still have to work toward a solution with the Department of Revenue about the legality of freezing residential property values. Robinson said he expects there to be continued litigation about whether county government had the authority to make that decision.
Some local leaders are looking for ways to circumvent the same situation when property assessments are calculated next year — with an additional year’s worth of value increases. State Sen. John Albers, R-Roswell, plans to introduce legislation that would cap property tax increases for Fulton County schools and the cities he represents, even as values continue to rise.
Robinson said the state requires his department to assess properties fairly and uniformly as values increase. But he said the goal is not to tax people out of their homes.
As Albers’ proposal and others are considered to help avoid future issues with increasing property values, Robinson said he hoped county leaders had learned a lesson about the consequences of their decisions.
"You need to think things all the way to the end of the process," Robinson said. "The devil is always in the details. …We need to make sure we aren't setting a trap for ourselves."