MillageRate.com

I have published an article at TalkGwinnett.com about my home county’s budget woes and a pending millage increase. What is interesting about our situation is how HB-233, if passed, would affect our tax bills:

The passage of HB-233 (and it seems certain) will result in a higher tax bill for you. Even though the county is expecting minimal growth in the Tax Digest (approximately 1%), even that small increase would have allowed the county to reduce the tax increase by .02 mills. Instead, the owner of a $200,000 home will pay $22 more if HB-233 passes. Because the digest depression is cumulative, HB-233 will cost you even more in 2010.

Are You Ready for Higher Taxes? | TalkGwinnett.com

(The following article was written in 2005 to illustrate how a mathematical millage is the only way to eliminate the “back door tax increase,” which is an increase in an individual’s tax bill resulting from a higher assessment when the millage rate remains the same from the previous year.)

A statement in the Clayton County School Board’s press release regarding the adoption of its millage rate for 2005-2006 insists that, although the Board was required to hold three public hearings as required by the “Taxpayers Bill of Rights,” it was not “raising taxes” because it was leaving the millage rate the same as the previous year.

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(First, please review the process for calculating the millage rate at www.millagerate.com/howto.htm . The described procedure has been taught and recommended by the Department of Revenue for as long as Georgia has used a millage to collect property taxes. If your taxing authority (city, county, school board) is not following this procedure, they are doing it wrong.)

The illustrations below are fictitious, but based on budget and tax digest data received from the City of Savannah for 2003 and 2004.

2003
Net Tax Digest (NTD) = $2,942,770,466
Part of Budget To Be Funded by Tax Dollars = $40,216,835
Mathematical Millage = 13.666 ($40,216,835 divided by $2,942,770,466 multiplied by 1,000)

2004
Net Tax Digest (NTD) = $3,201,312,715
Part of Budget to Be Funded by Tax Dollars = $42,293,242
Mathematical Millage = 13.211

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(This article has been updated for the 2009-2010 legislative session.)

This session, the Georgia Legislature may approve HR-1, which is a bill to amend the constitution to limit increases in the assessed value of property to a maximum of 3% a year.

If passed by the Legislature and approved by the voters via a referendum in November, the assessment “freeze” will apply to all property in the state except where more restrictive “freezes” or value offset exemptions are already in place; in that case, the more restrictive law will still apply.

We believe that this proposal, if approved, will cause great harm to the owners of lower-valued and less desirable homes in the state’s more stable areas. Those homes tend to be occupied by the elderly and those on fixed or limited incomes. Below, we have included an illustration of the harm that this bill will cause. Read more…

The millage rate calculation is not difficult. Here, step-by-step, is what your elected officials SHOULD do each year, and how you can estimate your own annual property tax bill:

The Government’s Role

1. The taxing authority must first formulate the budget, identifying all necessary expenditures. The budget process then projects expected non-tax revenue (fees, fines, interest income, franchise fees, etc.).

2. For most cities, counties and school boards, there will be a part of the budget that remains unfunded. That is the part that must be covered by your property taxes. It’s a revenue line item in the budget– we’ll call it [A].

3. Your Tax Assessor values all property in the county for tax purposes. The total value BEFORE any exemptions is called the Gross Tax Digest. The Tax Commissioner, charged with collecting the taxes, then deducts from that number the value of any property completely exempt from property taxes, as well as the value of any other exemptions or deductions (homestead, senior, conservation use, etc.). The value that remains is called the Net Tax Digest. We’ll call it [B].

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