Gwinnett County may find it tougher than expected to fund its budget this year as a record number of property tax returns and appeals chip away at values.
The county tax digest -- the value of commercial and residential property -- is expected to drop 8 percent to 9 percent, the director of the tax assessor's office, Steve Pruitt, said this week.
Local governments use the digest to determine how much they can generate in tax revenue. If the digest falls, governments receive less in property tax revenue unless they raise the tax rate.
A major reason for the decline in the digest, Pruitt said, is the record number of claims, or property tax returns, filed this year by taxpayers disputing the value placed on homes and businesses in the previous year. Gwinnett County received a record 34,000 property tax returns this year, more than twice the number filed in 2009 and about 15 times as many as in 2008.
Once a return has been filed, assessors review it and decide whether to change the valuation; if they don't agree with the taxpayer on the property's value, the taxpayer has an automatic right to appeal.
This year, the county received 9,628 such appeals, "as many as we've had in a long time," Pruitt said. Settling the appeals, which represent a $3.8 billion disagreement between the county and property owners, could take the rest of the year.
If a settlement cannot be worked out, the property owner can appeal to the Board of Equalization, which serves as a jury on tax dispute cases.
In the meantime, the assessor's office must set a countywide valuation figure local governments can use to lock in tax rates. That figure is likely to be somewhere between$28.21 billion and $28.52 billion, compared with 2009's digest of $31 billion.
Aaron Bovos, the county's finance director, said earlier this year that the county's 2010 budget was built and balanced in anticipation of a 7 percent decline in the tax digest.
But with a decline of 8 percent to 9 percent, the county would receive about $4 million to $6 million less in property tax revenue than it figured to help fund its operating and capital budgets.
County finance officials were not available for comment Wednesday.
County commissioners indicated after last year's 21 percent increase in the tax rate that they had little heart to wage a similar battle this year.
The Gwinnett school board adopted a $1.7 billion budget for 2011 on May 20. The spending plan anticipated a 7.6 percent decline in the tax digest.
The board voted unanimously at that same meeting to keep the mill levy the same as last year at 20.55 mills. Final adoption of the millage rate will occur in a specially called board meeting June 14.
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