MillageRate.com

We found this story by Ayanna McPhail in the Macon Telegraph regarding the plan by Fort Valley (Peach County) to adopt a budget that will require no increase in the millage rate.

Our research indicates that the Fort Valley City Council has adopted mathematically incorrect millage rates for years; probably since at least 2000.

To read our email to McPhail (which was also copied to the Fort Valley City Council), please continue…. To express yourself on this issue, you can send a letter to the editor of The Macon Telegraph at letters@macontel.com.

Ayanna,

I read your article on the Fort Valley millage rate ( article ). I am sure that the residents of Fort Valley will be happy to hear the property tax rate will not be going up and may even be rolled back.

However, their pleasure is unjustified; they are being deceived. But they will only know that if YOU follow up on this important story.

I can GUARANTEE that the Fort Valley City Council is proposing to adopt a millage rate that is mathematically INCORRECT, and that they have been doing so since AT LEAST 2000 and probably before.

Because the rate is mathematically wrong, the Council has for years either OVER-taxed or UNDER-taxed its property owners; it HAS to be one or the other. Most likely, the millage has been set too high; the city couldn’t have withstood five years of deficits.

The county, likewise, has adopted a mathematically incorrect rate since at least 2002, and for probably even longer.

Here is how I can say this–

There is only ONE WAY to mathematically calculate the millage rate, which as you know is the rate adopted by taxing authorities that is applied to the value of all taxable property within its jurisdiction to generate the dollars needed to fully fund the budget.

You divide [A] the portion of the budget to be funded by property tax dollars by [B] the net tax digest. [A] divided by [B] equals [C]. [C] is then multiplied by 1,000 to give the millage rate, which is the amount of tax, in dollars, on every $1,000 of taxable property value.

This simple math has been taught for years by the Department of Revenue to county Tax Commissioners, assessors and appraisers, as well as Board of Equalization members, but it is NOT taught to newly-elected County Commissioners, City Council members and School Board members, the very folks who adopt the millage rate!

Also, you may be surprised, if not alarmed, that there is no law that requires taxing authorities to adopt mathematically-correct millage rates. The law currently allows taxing authorities to set any tax rate they choose. Consequently, taxing authorities often adopt arbitrary, politically-palatable rates that have absolutely no mathematical connection to their budget needs. In fact, my research indicates that more than 9 out of 10 Georgia taxing authorities adopt a mathematically incorrect rate each year.

The result of this failure to “do the math” is that Georgia’s property owners often pay more than is necessary to fully fund the cost of their local government. Such may be the case in Fort Valley and Peach County this year.

Fort Valley millage rates:

2000 – 10.000
2001 – 9.300
2002 – 9.300
2003 – 9:300
2004 – 10.000

Now that you understand the math, you can see how it is a near mathematical IMPOSSIBILITY for rates to stay the same from year to year. Last year, it appears that Fort Valley must have felt some pressure to generate more tax revenue, so they bumped the rate up to a nice even 10.000, which is also highly unlikely, mathematically speaking.

Likewise, your article indicates that if a rollback rate is adopted, the Council is likely to go back to 9.30… ANOTHER clear indication that they plan to pick a random number rather than a mathematically-calculated one.

Peach County millage rates:

2000 – 14.860
2001 – 12.150
2002 – 15.000
2003 – 15.000
2004 – 16.000

As you can see, the county has also adopted round number rates from year to year– a clear indication that the County Commission has adopted rates that have no mathematical connection to their actual budget needs.

The same conclusion applies to Byron (2000=8.000, 2001=6.357, 2002=7.000, 2003=8.300, 2004=8.300).

I invite you to visit www.millagerate.com for more information on the correct procedure for calculating the property tax millage rate. Once you secure the information needed to complete an analysis, we will be happy to help you “do the math.” You will need the portion of the budget to be funded by property tax dollars as well as the net tax digest. For the county, there may be separate numbers for the tax digest (incorporated and unincorporated). There should also be separate amounts for the budget, although not all jurisdictions divide the budget by incorporated and unincorporated expenditures.

We hope that you follow up on this important story. We consider it extremely newsworthy that the people of Fort Valley and probably Peach County have most likely been overtaxed for years, primarily as a result of the innocent ignorance of the elected officials. We will follow your efforts at our site and at our blog at www.millagerate.com/blog/ .