We got a little ink in the Chattanooga Times-Free Press this week when we were contacted about a deal that Catoosa County in north Georgia put together for Costco:
Under the contracts agreed to Friday, the county will buy the land slated for Costco for $4.8 million, spend $4.5 million to improve it and then sell it to Costco for $4.8 million.
To bring the retailer to their county, Catoosa proposes to raise the millage rate to generate the $4.5 million, but offset the increase with sales tax pennies from their Local Option Sales Tax (LOST). County officials have told taxpayers that it will essentially be a wash… no cost to them.
There are several things wrong with the proposal, not the least of which is the notion that the sales tax will completely offset the taxpayers’ obligation. Sure, the LOST (which must be used for millage rollback) may offset the tax increase, but exactly who will be paying that penny sales tax at Costco and other county merchants? Right, the property owners.
In essence, the property taxpayer will be “paid back,” to a certain extent, the tax increase with his own sales tax pennies.
Chattanooga Times Free Press | County balances cost of Costco
Of course, you know our solution. Require taxing authorities (cities, counties, school boards) to “do the math.” As assessments increase, the millage rate must decrease, simply as an operation of the math, as long as the politicians hold the line on the cost of government services.
Hancock County, GA is typical in a state where very few politicians even understand the millage rate process:
The county historically had a high millage rate, but very low property assessments. Hill said the assessments are now in line with surrounding counties, but with the high millage rate, taxes have soared.
Local tax revolt in Hancock County | ajc.com
Suwanee, GA (Gwinnett County) leaders are boasting about the recent confirmation of their AA-minus bond rating by Fitch Ratings. Knowing what we do about Suwanee’s property taxation practices, we looked at their tax rates for the past five years.
What we found surprised and disappointed us—as the city’s debt millage decreased each year, the City Council arbitrarily increased the M&O millage rate to maintain the same overall rate… apparently with no consideration for the actual cost of government for its property owners:
As you, the Suwanee property owner, paid down the public debt, your tax rate should have decreased accordingly; at least, as long as the City Council held the line on the cost of government. Instead, city leaders maintained the same arbitrary total rate and, in essence, rolled your overpayment into M&O. They have essentially used the decrease in the city’s debt responsibilities to fund increases in the cost of government.
Bragging Rights or Just Overtaxation in Suwanee? | TalkGwinnett.com
State Senator Chip Pearson has issued a press release to clarify just who is to blame for a significant jump in property tax bills this year. His publication exposes a primary problem with Georgia’s property tax code—state legislators who do not know what in the hell they are talking about.
Read more…
An open letter to the Hoschton City Council:
As you revise your charter, I would suggest, in regards to the calculation and adoption of the millage rate, that the charter simply require that you follow the procedure that has been recommended and taught by the Department of Revenue for decades.
There is only one CORRECT way to calculate the millage rate so that government takes no more and no less from its property owners than required to fully fund the budget.
You can learn the correct way to calculate the rate at www.millagerate.com/howto.htm . I am available to discuss the benefits of following the correct procedure at your convenience.
The millage rate, currently a hot button issue in Hoschton, is one area [Council member Jim] Jester wants to re-evaluate. Right now, he said, Hoschton can levy a property tax "from 0 to infinity."
"I mean literally it can be anything without a public referendum," he said.
Hoschton revamping 90-year-old charter
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