Fulton County sent most property owners new tax assessment notices last weekend, fixing erroneous and omitted information from the first batch that went out in May, but the headache could be far from over.
The 230,000 mailings push the deadline to appeal tax values back five weeks, to July 26, for 70 percent of the county, and experts are raising alarms that the delay could further complicate what's already expected to be a messy year for Fulton.
Though the full impact isn't clear yet, the implications could be hundreds of thousands of dollars in lost interest earnings countywide, surpassing the estimated $140,000 cost of re-mailing notices. If a swarm of appeals threatens cities', schools systems' and the county's coffers, there also the potential for cuts in government services or increases in tax rates.
Some experts question how boards can set their millage rates without knowing how many appeals will come in. People who contest their property assessment pay their bill based on 85 percent of their tax value until their case is settled. That can take from a few months to a few years.
"That's where I think they're going to have trouble, estimating what I call jeopardy value," said Vicki Lambert, Local Government Services Division director for the state Department of Revenue.
Matt Buff, tax administrator for Tax Commissioner Arthur Ferdinand, said that in past years, local governments could set a millage rate based on estimates of their total property values. But this year, an unprecedented number of appeals are expected as a result of changes to the tax laws and plummeting property values.
School districts and municipalities face the prospect of billing taxpayers too much or too little, he said.
Roswell set its millage rate earlier this month, keeping it at the same 5.45-mill level as last year. Mayor Jere Wood, who wanted it set lower, said the rate is conservative enough that he doesn't anticipate problems.
Atlanta is scheduled to approve its millage rate next week, leaving it at last year's level of 10.24 mills under Mayor Kasim Reed's budget. To close an $18 million gap, proposals include layoffs, slashing salaries and cutting park services.
Last month, the assessors office came under criticism after about 136,000 Atlanta property owners received notices with grossly inflated estimates of 2011 tax bills, the result of a formula error. The assessors board opted to re-mail notices to most Atlantans and to nine cities whose notices didn't include estimates of municipal taxes.
Buff said extending the appeal deadline will hold up certifying the tax digest with the Revenue Department and will probably push billing back by at least five weeks. That means delays in governments collecting revenue, and lost interest-income earnings.
How much a delay could cost schools and municipalities is difficult to estimate, as interest rates and arrangements with banks vary.
"A delay of a month to 40 days in receiving hundreds of millions of dollars is a big deal," said Michael Bell, a public finance professor at Georgia State University.
With interest rates low, finance officials downplayed the significance of lost interest income. Atlanta Public Schools expects to miss out on about $25,000, spokesman Keith Bromery said. Fulton County Budget Manager Hakeem Oshikoya said he couldn't estimate.
"It's going to be very small," he said.
Based on Fulton County schools' projected annual interest earnings, a month's loss would be about $40,000, but Chief Financial Officer Robert Morales said it's difficult to calculate because it depends on market forces and how fast revenue flows into the county.
A higher cost could come if the school system has to issue a tax anticipation note, a short-term loan to cover expenses because of the late billing. When the school district issued a $92 million note in 2009 -- when the tax commissioner delayed billing by three months, saying he couldn't trust the assessors office's data -- the cost in interest was about $103,000.
"We haven't officially been told anything's been pushed back," Morales said. "We have to always assume worst-case scenarios when you're dealing with cash flows for the school system."
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