Gwinnett County residents would see no property tax increase under a proposal to be considered next month. And it’s possible they’ll get a tax cut.
On Aug. 8 Gwinnett commissioners will consider a proposal to keep the 2011 tax rate unchanged at 13.25 mills. If the proposal passes, many residents could see lower tax bills this year because the value of their homes have declined.
Commissioners also must decide whether it makes sense to allow part of the levy -- 0.23 mills designated for library and road construction -- to expire or use the estimated $4.8 million it generates to pay off other debts.
Gwinnett and other local governments have struggled to balance their budgets as property tax revenue declines amid a continuing real estate slump. To make up for lost revenue, some districts have raised tax rates.
DeKalb County this month raised its tax rate by 26 percent. On Tuesday Cobb County commissioners will consider raising their rate by 17 percent.
In 2009 Gwinnett commissioners raised property tax rates by 2.28 mills, or 21 percent. The move prompted a public backlash, but it also was cited by credit rating agencies that continue to give Gwinnett top ratings.
Another tax increase is unlikely this year. Gwinnett has advertised a proposed rate of 13.25 mills, and under state law it cannot approve a higher rate without advertising it.
Gwinnett Commission Chairwoman Charlotte Nash said it doesn't make sense to increase taxes when residents and businesses are struggling.
But that sentiment is not unanimous. Commissioner Lynette Howard favors a tax increase of less than 1 mill to raise money as the county struggles to balance its budget.
She said declining revenue could jeopardize Gwinnett’s top credit rating and lead to big benefit cuts for employees who already are stretched thin. And she said failing to raise taxes a little now may mean a larger property tax later.
“I just don’t think the citizens can handle a large millage rate increase like we’ve had in surrounding counties,” Howard said.
Though a tax hike isn’t likely, a tax cut is possible.
In 1986 Gwinnett voters approved general obligation bonds for library and road construction. Gwinnett used part of the proceeds from the 2009 property tax increase to pay off that debt.
Rather than allow the 0.23-mill levy to expire, commissioners in February decided to shift it from bond payments to the general fund to help address an $18 million deficit. The move would mean $4.8 million in revenue for the fund, which pays for police and fire protection and other basic services.
But the county’s proposed 2011 tax rate does not shift the levy to the general fund. Instead, commissioners will consider using the money to repay the debt from a jail expansion. Or they could decide to let the levy expire after all.
Nash and other commissioners say they’re still weighing the options. As a candidate for commission chairman in March, Nash said the commission should allow the 0.23-mill levy to expire.
“The argument for keeping the same millage rate is that paying off debt saves money in the long run,” Nash said. “The argument in favor of reducing the millage rate is that when a bond issue is fully retired, the associated millage should lapse.”
If the 0.23-mill levy expires, it would save the owner of a $200,000 house about $16 a year.
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