Cobb weighs 1¢ sales tax to reduce property levy

Cobb County could ask voters whether they want to increase sales taxes to pay for county services and, in exchange, get a break on property taxes.

Sam Olens, chairman of the Cobb County Commission, cited the public's displeasure with the way property is assessed as his reason for looking into the idea of a homestead option sales tax.

"There's significant distrust of the assessment process in Georgia," Olens said. "The political reality is folks are absolutely disgusted with property taxes."

State legislators passed many bills this year to address what they saw as an antiquated and broken property assessment system. Senate Majority Leader Chip Rogers (R-Woodstock) has said he opposes property taxes in general.

Among metro counties, DeKalb and Rockdale now have such a homestead option sales tax.

If approved, Cobb County would levy an additional penny sales tax to its current rate of 6 percent to pay for the county's general fund expenses, including employee salaries, utilities and police cars. The county would raise an estimated $103 million from a penny sales tax, said Brad Bowers, Cobb County's finance director. The tax would not apply to food or prescription drugs, he said.

The rules governing homestead option sales taxes require counties to use 80 percent of the revenue collected to reduce property taxes on primary residences that have a homestead exemption. In Cobb's case, the county would use $70 million to eliminate property taxes on the general fund portion of a tax bill, Bowers said. There would be $33 million left over per year to pay for capital expenses or to expand the county's reserves.

Olens said he expects county commissioners to talk about the sales tax at town hall meetings to elicit public response before voting on the idea. Any vote would be months away, he said.

If the County Commission gave the go-ahead, voters would have to approve the idea, and the state Legislature would have to pass a bill allowing Cobb to levy the tax.

When asked whether it is wise to move the county from a property tax to a more volatile source of income, such as a sales tax, Olens acknowledged that sales tax receipts do dip in a recession.

"You handle the volatility by significantly increasing the reserves for down times," Olens said.

Cobb County currently collects one penny out of every dollar for roads and buildings as part of a special local option sales tax; the school board collects a penny for its special local option sales tax; and the state collects 4 cents.