Not everyone sold on property tax plan

Cherokee County, home of Senate Majority Leader Chip Rogers, has no problem with the provision in his expansive property tax bill calling for counties to mail every property owner an assessment notice every year.

Cherokee is one of the few counties already doing that. Most counties mail property owners an assessment notice, which tells the owner what the county thinks his or her property is worth, every third year.

“I knew it would work because we are already doing it in Cherokee County, and we are holding them up as an example,” Rogers said.

He thinks homeowners are paying too much in taxes in this era of falling home prices and believes that knowing home values yearly could help correct that. The 47-page bill also provides that the assessment notice list the current assessment, the previous assessment, the fair market value of the property and the name and phone number of the person in the assessors office to call if the taxpayer has questions or wants to appeal.

Cherokee County leaders say yearly notification has some advantages, such as moderating increases or decreases in the tax base, but they say other provisions of Rogers’ bill could cause problems. Like other county and city leaders around the state, they are perhaps most concerned about the bill’s provision for year-round appeals.

Buzz Ahrens, chairman of the Cherokee County Commission, said allowing year-round appeals could unbalance budgets.

Typically, homeowners in Georgia receive notice of their property value in May and have 30 to 45 days to appeal. In June and July, county and city officials use those property valuations to set budgets and millages, which determine how much property owners owe in taxes. Tax bills are computed and mailed in the fall.

That is when homeowners see how much they have to pay and when sticker shock may set in, Ahrens said.

“If we got a bunch of appeals in September for the current year, it would have a definite effect on our budget. Then we would have a gap right away,” he said.

Rogers said, “We may have to scale [that provision] back.”

John Adams, Cherokee County’s chief appraiser, said the county has sent yearly assessments since the 1990s. His staff of 18 appraisers doesn’t physically visit each of Cherokee’s 94,000 pieces of property yearly. Instead, the appraisers try to visit about one-third of all properties to make specific adjustments, note how different neighborhoods and communities are faring, review all sales, and keep tabs on forces that push prices up or down, such as the price of building materials and depreciation.

They enter the data into a software program that makes general adjustments on properties not visited.

That is similar to what most counties do, appraisers in metro Atlanta said.

For instance, Fulton County does an analysis of every parcel every year but only mails assessment notices to about one-third of its 325,000 property owners, chief appraiser Burt Manning said.

Calvin Hicks, DeKalb County’s chief appraiser, said yearly mailings would probably not require more workers. DeKalb mails between 50,000 to 100,000 notices each year to its 233,000 property owners.

One cost that will go up will be printing and mailing costs of assessments, estimated at about 50 cents per mailing, according to Steve Pruitt, Gwinnett County’s chief appraiser. Pruitt estimates sending annual notices will cost the county $100,000 in additional postage and printing costs.

Adams said an advantage to the yearly notice is that it can help prevent sticker shock and cut down on appeals. If a homeowner gets a notice only every third year, any appreciation or depreciation can appear to be greater than if the homeowner watched the value change year by year.

In Cherokee County in 2008, 3,761 property owners appealed their assessments as the bottom was falling out of the housing market. That was an appeal rate of 3.9 percent of property owners, about double the rate during times when prices are rising. That dropped in 2009 to 3,022 appeals, which was 3.2 percent of property owners.

Compare that to Fulton County, where appeals were 5.3 percent of property owners in 2008 and 5.8 percent in 2009.

“It has worked real good for us,” Adams said of the yearly notices.

Cherokee County Manager Jerry Cooper likes yearly assessments because he knows his budget figures are based on current property values, not numbers that are 3 years old. And, he said, it is more fair to homeowners. He estimates county property values will drop 7 percent to 10 percent in the coming year, which means tighter budgets. The effect on schools will be more pronounced, because county schools get about 69 percent of property taxes, he said.

Frank Petruzielo, superintendent of Cherokee County schools, said his school system is suffering as are all school systems, which are furloughing teachers and cutting expenses.

He has concerns about Rogers’ bill, such as the provision allowing people to pay their taxes in installments.

“I guarantee our kids don’t show up in installments,” he said. “They all show up in August.”

Because of taxes and state funds arriving late, the system has to borrow money short-term to pay staff at times during the year. The school district has to pay interest on those loans, which sucks more money out of the system, Petruzielo said.

He takes issue with another major provision of the bill: when a property sells, the tax appraisal of that property may not exceed the sale price for one year. The superintendent believes that, in an age of foreclosures and desperation sales, the provision will drive appraisals down unfairly, further cutting into school system revenue.

“I guess [Rogers] has never heard of a short sale,” Petruzielo said.