When new Fulton County property assessments finally go in the mail Friday, they will start the county down a tight timeline that needs to be followed to the letter if taxes are to be collected before the end of the year.
The assessment notices first went out in late May, but will be sent again this week after county commissioners decided in June to freeze property assessments at 2016 levels after many residents complained about stark increases in values in their neighborhoods.
Assessments form the basis for the tax digest, which in turn allows county leaders to determine the tax rate. Then, bills are sent. So a setback in one step of the process delays the whole process. Normally, the county sends tax bills in early August and money is collected in mid-October. This year, the county hopes to have bills in the mail when money would normally be due.
If there is any more delay, the county could be late paying back a $200 million loan it took to cover the gap before tax money comes in. The county has $146 million in reserves, not enough to cover the bill.
So far, Fulton officials are confident they can make it work.
“We’re prudently managing expenses,” Fulton County Manager Dick Anderson said. “Right now, we don’t need to take any extraordinary actions.”
Even if there is a delay in setting tax rates, or sending bills, the consequences could be minimal. Clint Mueller, the legislative director at the Association County Commissioners of Georgia, said in some cases, counties have simultaneously borrowed money for a new loan and paid off the old loan with that money. If Fulton finds itself in a jam, he said, that could be an option. It would just cost the county additional interest.
The typical process has been set back by about two months. Cities, school districts and community improvement districts are expected to get estimates of the value of their tax digests at the end of August. They’ll have to set their tax rates in early September so when the window for appealing property values closes Sept. 18, the tax commissioner’s office can plow ahead with getting bills out.
Fulton Chief Financial Officer Sharon Whitmore said setting the tax rate in early September is “the best chance we have” of staying on schedule. Tax bills should be in the mail by mid-October.
After the bills go out, Atlanta residents have 45 days to pay their property taxes, while residents elsewhere in the county have 60 days. That difference in deadlines should mean money comes in before the loan has to be paid back Dec. 29, Whitmore said.
“I’m firmly believing we’re going to get enough money, that everything is moving smoothly,” said Patrise Perkins-Hooker, the county attorney. “We’re not in crisis management mode yet.”
Mueller, with the county comissioners association, said because the county is re-sending assessment notices, it’s “plowing new ground” for what is typical. But he said many counties don’t collect their tax revenue until December, and are OK.
Fulton hasn’t yet set its 2018 budget, but it planned to spend $991 million in 2017.
Jim Plunkett, a partner at the law firm Shepard Plunkett in Augusta, said Fulton could, presumably, default on the loan — but that he doesn’t see that as a significant risk. Even if the county is a few days late on its payment, it would likely have enough money in hand to pay back the loan before any action could be taken.
Additionally, Dentons senior partner Steve Labovitz said, Fulton Tax Commissioner Arthur Ferdinand is known for his high collection rate. It’s only if bills get “pushed back and pushed back and pushed back” that the county could run into a problem.
“I think they will be able to work through it,” Labovitz said. “They’re very capable down there in Fulton County.”
John Eaves, the Fulton County chairman, said the county’s timeline “does not give a whole lot of wiggle room.” But, he said, a delay in payment “is the absolute worst-case scenario.”
“There is not going to be any sort of local shutdown,” Eaves said.
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