New property appraisals reflect the collapse of real estate values in DeKalb County, but a lawyer who filed a lawsuit against the county tax assessor this week said official values are still too high.
Tax officials in DeKalb initially ignored two new state laws when they calculated property values, and were pressured to go back to the drawing board. Numbers they released last month didn't include the effect of foreclosures, which the the Georgia Legislature mandated beginning this year. The early numbers also ignored a new freeze on property values imposed by state lawmakers.
In April, the tax assessor had values rising. The new valuations released last week have the worth of land and buildings in DeKalb dropping by about 4 percent from last year, but John Woodham, the attorney who sued Tuesday, said even these new, depressed values do not reflect reality.
"It ought to be more like 12 percent," said Woodham, who is representing several property owners who've formed an organization called the DeKalb County Taxpayer Association. Woodham is the lawyer who got the Georgia Supreme Court to declare the use of education revenue in Tax Allocation Districts unconstitutional. The Legislature later reversed the effect of the decision by amending the constitution, and voters ratified the change.
The lawsuit in DeKalb Superior Court could force the DeKalb board of assessors to revisit the certification of new property values they approved last Thursday. The new results weren't uniformly bad for city officials.
Avondale Estates, Chamblee and Decatur actually saw increases in their tax base because of new construction. Property improvements are unaffected by the three-year freeze in values, which is retroactive to last year. And in those cities the new buildings compensated for the loss of value to foreclosures.
"We've had a lot of people adding additions to their houses," said Avondale Estates City Manager Clai Brown.
But most governments will either have to cut their budgets, raid reserves or raise taxes. Figures in April showed values rising county-wide, with increases in nearly all 10 of DeKalb's cities. The new numbers show reversals for the county and half its cities. The worst off was Stone Mountain.
In April, before foreclosures and freezes entered the equation, the value of real estate there showed a decline of about 5 percent from the official figures in June 2008. The new valuations indicate that property in Stone Mountain declined about 12 percent, according to an analysis of data obtained from the tax assessor's office.
City Manager Barry Amos attributes the drop to a condominium complex where nearly all the units were foreclosed upon.
"Our budget is already tight; it's going to get even tighter," Amos said. He expects to take at least a $100,000 hit in his budget. The city will get by with reserve funds, drastic reductions in capital projects and a lucky turn of events in the global economy: the free fall of gasoline prices. Like many governments, Stone Mountain budgeted for $4-a-gallon gas.
The new values mean a 4 percent decline in the DeKalb school system's tax base. The school board recently adopted a fiscal year 2010 budget that assumed a 1.7 percent decline, yet schools spokesman Dale Davis said the tax rate will not have to be increased. He said the budget assumed a $7.5 million drop in local revenues.
The real estate tax base for county-wide government services fell 3.6 percent while the base for services in unincorporated DeKalb dropped 4.4 percent. The declines opened a $6 million hole in the 2009 county budget adopted in February, county finance director Mike Bell said. Commissioners this week deferred a vote on a resolution that would state their "intent" to raise the tax rate 3.73 percent. Bell said he expects budget cuts or use of reserve funds to eliminate the need for a tax increase by the time the rate is actually set on June 23.
"We're going to come in, I think, substantially below that," he said.
Official values could shift again next month. County tax officials mailed 95,000 letters Wednesday informing owners that their values dropped. People who think they should have dropped more have until June 19 to file an appeal.The new lawsuit could alter official values yet again. Woodham, the lawyer, said his clients don't believe the tax assessors' office could have accurately revalued the whole county in the few weeks since their initial effort in April.
"Part of the exercise is for the court to provide some guidance as to whether they are doing it properly," he said.
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