Early indications show Gwinnett's tax digest continues to fall, and there may be no bounce for two years.
Falling property values, such as last year's $1 billion countywide decline in the tax digest, mean the county receives less revenue to operate. It's the same story throughout metro Atlanta, where counties are closing ranks on expenditures and school districts are closing buildings in anticipation of tax revenue shortfalls.
Last year's revenue drop spurred a tax increase in Gwinnett. This year the slide in value appears much steeper and the jury is still out on taxes.
Chief assessor Steve Pruitt said at a special briefing Tuesday that this year's massive reappraisal project resulted in a $4 billion drop in residential values. His office is mailing out some 150,000 notices about changes in assessments, most showing about a 17 percent decrease in value.
Owners filed about 33,000 property tax returns this year seeking adjustments to their appraisals. That's a 125 percent increase from last year's 14,000 returns filed with his office.
But an equal hit may be coming from commercial real estate this year, Pruitt said.
Taxpayers placed a value of about $8 billion on the 4,240 commercial returns filed, he said, but the county has these properties listed at above $12 billion, more than a $4 billion difference.
"That's why commercial property has caught up with residential," Pruitt said.
Because governments assess taxes against property at 40 percent of its value, the losses in residential and commercial could constitute a decline of close to $3 billion in Gwinnett, or 10 percent of the tax digest. And that would be more than county finance officials had anticipated.
The 2010 budget, bolstered by a tax increase passed in December, took into account a 7-percent decline in the tax digest for this year, said finance director Aaron Bovos.
"I'm concerned," said Commissioner Mike Beaudreau. "I think I wouldn't be doing my job if I wasn't concerned."
Beaudreau said the county has taken some proactive measures, especially reducing its long-term expenditures.
Pruitt said he is not willing to predict a number until all appeals are completed in June. He said he expects about 10,000 appeals to be filed.
Even with the record number of reappraisals, the county should be on target to mail out tax bills by mid-July, he said.
County officials should look for more of the same next year, said Alfie Meek, economic analysis director for Gwinnett County.
The economic picture shows few signs of improvement, he said, as employment growth continues to trend down and average wages fall. Employment growth through the third quarter of 2009 was down 7.3 percent, he said.
The combination of job loss and wage erosion, Meek said, has only added to the downward trajectory of sales tax revenues.
Collections fell by 8.8 percent in 2008, 7 percent in 2009, and 6.6 percent in January.
"I had expected a drop, but I did not expect this kind of drop," Meek said.
Looking ahead, Pruitt said that even if the real estate market recovers late this year, any positive impact on the tax digest won't be felt for a couple of years. And it wouldn't be until 2013 that the digest would start climbing again, he said.
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