South Fulton County residents face a major property tax rate hike next year, but in a world of rapidly tumbling home values they're being assured they won't pay higher bills.
"The 1.5 mill increase will have little to no effect on their tax bill," said their county commissioner, William "Bill" Edwards, who is backing the rate increase to help plug a $7 million shortfall in the unincorporated south's 2012 budget.
"The tax assessments are so low that it probably won't hurt them," he said.
Most can expect smaller bills -- or, in the case of at least 8,000 of south Fulton's 42,000 property owners, zero bills for both countywide and city-type services.
Such is the case with Yvonne Armstead of the Meadows subdivision near the Atlanta airport, whose home's appraised value sank from $82,100 to $56,700 this year. That's so low the county's $30,000 homestead exemption, a discount for taxpayers who live at their properties, nullifies her home's 40 percent tax value.
Armstead said she wonders how the county can pay for police patrols, firefighters and parks if homeowners like her aren't contributing.
"What are we going to lose because of this?" she said. "What are they going to hit us with next? That's my question."
The section of the county left behind after the incorporation of the cities of Sandy Springs, Johns Creek, Milton and Chattahoochee Hills is struggling to keep up basic services in a down economy.
Unincorporated residents pay a special tax rate for public safety, parks and other services, and the new cities took their portion of those taxes with them when they bolted.
In an interview last summer, former County Manager Tom Andrews said there’s a correlation between the rising rate and the departing cities, particularly the northern cities with their high-dollar real estate. DeKalb County has similarly suffered from the loss of Dunwoody revenues.
“Money moved from the north to the south,” Andrews said. “No question about it.”
The proposed 17 percent rate increase would put south Fulton's tax rate at more than double what it was in 2005 when Sandy Springs became the first new city to form. The unincorporated rate will have climbed from 4.730 mills in 2005 to to 10.469 mills in 2012 -- translating to about $525 on a $200,000 home.
The final budget is expected to be approved in mid-January.
Johns Creek Mayor Mike Bodker said he sympathizes with unincorporated residents, but he blames an inefficient county government for their tax rate likely doubling.
"The problems that we have complained about are not unique to north Fulton," he said. "Bad governance is bad governance."
Edwards, however, fired back that the special services district is run as tightly as any city government. Since 2005, the district's budget has dropped from $117.8 million to $43.4 million and the number of employees from 1,109 to 377, according to information provided by the county's budget manager.
South Fulton rejected cityhood of its own by 85 percent in a 2007 referendum, leaving its 87,500 people as the only Fulton residents still under direct county governance. Meanwhile, the recession has the Southside wracked by high rates of foreclosure and unemployment.
Armstead said she and her husband have been left upside down in the split-level, four-bedroom, two-bathroom house they paid nearly $91,000 for 12 years ago. A house nearby just sold for about $26,000.
The assessors office expects the south's overall property values to fall another 8 percent to 9 percent next year, and the tax rate hike has been factored into the special services district's tentative 2012 budget. The other option, Edwards said, would be to take police officers or firefighters off the streets, or to shut down some parks.
"By doing this, we're not making a dime," said the commissioner, who delivered the message in a series of community meetings earlier this month. "We're just maintaining services where they were last year. We're not hiring anyone, and we're not letting anyone go."
Taxpayers seem to be grudgingly going along.
"Personally speaking, I don't have any major gripe with it," Sandtown Community Association President Winston Carhee said. "You have to pay for things that you utilize, and if you value it, you're willing to pay for it."
According to tax commissioner's office data, if property values decrease by 8 percent next year and the tax rate goes up 1.5 mills, most homeowners would see lesser bills. The owner of a $100,000 home with a homestead exemption would see the total bill drop from $916 to $804.
Michael Bell, a Georgia State University public finance professor, cautioned that tax calculations depend not on the area's overall decrease, but how the county values individual properties. If the assessors office keeps a home's value the same or bumps it up, the bill would go up.
"The real downside to this," said Benny Crane, a south Fulton insurance agent who advocated for cityhood four years ago, "is when the property values come back, if we don't have a rollback we'll be paying out the nose."
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