Gwinnett County voters would decide this fall whether they’re willing to pay a higher sales tax in exchange for property tax relief under a proposal offered Tuesday by a county commissioner.
Commissioner Mike Beaudreau said he might propose a local option sales tax referendum for the November ballot. Though details remain to be worked out, Beaudreau said the 1 percent sales tax would be used to pay for county operations and for a comparable reduction in property taxes.
The result, he said, would make Gwinnett less dependent on property taxes and result in no net tax increase.
Other commissioners said they were surprised by the proposal and were noncommittal.
“There may be some merit to it,” said Commissioner Lynette Howard. “There may not.”
Beaudreau’s proposal came at a planning workshop at which commissioners learned the county tax digest – the value of all taxable property in Gwinnett – will decline another 8.6 percent this year, costing Gwinnett about $28 million in property tax revenue.
Gwinnett officials had expected the decline and prepared their 2012 budget accordingly. But Chief Appraiser Steve Pruitt said he expects the digest to continue falling in coming years. The main reason: Banks continue to foreclose on homeowners who can’t pay their mortgages and then sell those homes for pennies on the dollar.
“Until the banks get out of the [real estate] market, the market is not going to change,” Pruitt told commissioners.
According to projections prepared by Jeff Dorfman, a professor from the Agricultural and Applied Economics Department at the University of Georgia, Gwinnett’s tax digest will have declined 25 percent from 2008 to 2013. That will have cost Gwinnett a cumulative $271 million in property tax revenue, money the county can’t spend on police, fire protection and other services.
Beaudreau said one solution is to reduce Gwinnett's dependence on property tax revenue, which is why he might propose swapping a sales tax increase for a property tax reduction.
Currently Gwinnett residents pay a 6 percent sales tax – 4 percent for the state, 1 percent for schools and 1 percent for county construction projects. Under Beaudreau’s proposal, voters would decide whether to pay another 1 percent sales tax to help pay for county operating expenses. Property taxes would be reduced.
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