MillageRate.com

If you own property within the limits of one of Gwinnett’s cities, the chances are pretty good that you are being overtaxed.

According to Snellville activist and MillageRate.com founder Bob Griggs, not only will your tax bill be too high this year, but the tax rate for almost every taxing authority in the county was incorrectly calculated. As a result, many Gwinnett property owners will pay more in taxes than will be necessary to fund their hometown’s general budget.

Griggs recently concluded an analysis of the millage rates adopted by the county government, the school system and almost every Gwinnett municipality for fiscal year 2005-2006.

The millage rate is the dollar figure by which the taxable value of every property in the county is multiplied to generate the tax dollars needed to fund each jurisdiction’s annual budget, after all non-tax revenue is considered. If calculated correctly, Griggs said, the millage rate is nothing more than the answer to a simple math problem which, when applied to the jurisdiction’s Net Tax Digest– the total value of all taxable property– produces the budgeted amount, no more and no less.

He found that all but one city– Grayson– failed to follow the procedure recommended by the state Department of Revenue for calculating the rate. The Gwinnett County Commission and the Board of Education also adopted mathematically incorrect rates.

The rates of four jurisdictions this year are too low and will fail to fully fund the respective budget, creating, at least on paper, measurable deficits. The remaining cities– Berkeley Lake, Dacula, Duluth, Lawrenceville, Lilburn, Snellville, Sugar Hill and Suwanee– have adopted tax rates that will take more tax dollars from property owners than their respective budgets require. The total overtaxation for all taxing authorities that have adopted inflated rates is over $3 million.

The worst example of overtaxation is Suwanee, where the City Council adopted a millage rate of 3.820 to generate the $1.53 million in tax revenue needed to fully fund its $8.75 million budget. The adopted rate will actually generate at least $2.4 million, meaning that the city will take approximately $867,000 more from its property owners than necessary. The adopted millage rate is 56% too high; the correct rate is 2.441.

The owner of a $150,000 Suwanee home could pay as much as $82 more than necessary this year. The owner of a $1,000,000 commercial property will pay over $500 too much.

Suwanee is followed by Sugar Hill, whose adopted rate of 3.80 (38% too high; correct rate 2.747) will bring in at least $498,455 more in tax dollars than is required to fund the city’s 2005-2006 budget. That could mean an extra $63 this year to the owner of a $150,000 Sugar Hill home.

Sugar Hill was followed, in order of severity of the overtaxation, by Dacula (28% too high), Duluth (19%), Lawrenceville (17%), Lilburn (10%), Snellville (8%) and Berkeley Lake (less than 1% error).

While Suwanee’s rate was the most inflated, the more disappointing example of overtaxation, said Griggs, was his hometown of Snellville. The Council under 26-year incumbent Mayor Emmett Clower had overtaxed Snellville property owners, some years by as much as 35%. The city had amassed a surplus of over $4 million as a result of inflated tax rates.

In 1999, Griggs helped end the systematic taxation when he taught members of the Snellville City Council and staff how to correctly calculate the tax rate. As a result of Griggs’ efforts, Snellville property owners received their first tax cut in almost two decades, a 25% reduction, when the tax rate became the top issue in that year’s mayoral election.

In recent years, however, the Snellville Council has abandoned the correct procedure, this year adopting a rate (3.65) that will take approximately $191,000 more than will be necessary to fund the city’s $10.7 million budget. That’s approximately $17 in overtaxation to the owner of a $150,000 Snellville home.

Not every Gwinnett jurisdiction will overtax its property owners this year. Four taxing authorities– Loganville, Norcross, Gwinnett County and Gwinnett County Schools– have all adopted tax rates that will, at least on paper, fail to generate enough tax dollars to fully fund their respective budgets.

Loganville’s millage, the same 9.0 that it has adopted for the past four years, is approximately half a mill too low, according to Griggs’ mathematical analysis.

Likewise, the Gwinnett County Public School System’s new rate is still a fraction too low, mathematically speaking, despite an increase this year (to 19.250). The correct rate, according to Griggs, is 19.318; the adopted rate will produce a “paper” deficit of approximately $1.66 million on a $475 million total property tax bill.

“The School Board uses a faulty process to calculate its rate,” said Griggs. “Despite that, the difference between the adopted rate and the mathematically correct rate is negligible.”

The County Commission will underfund the county’s 2005 operations budget by approximately $27 million by adopting the same rate as last year (10.14) rather than the mathematically correct rate recommended by the Finance Department staff. The deficient rate will generate only about 90% of the $258.8 million in tax dollars needed to fully fund the budget.

“Rather than adopt the mathematically correct rate, the County Commission adopted the `politically palatable` rate,” said Griggs. “The Commission feared public reaction to a tax increase, so it instead adopted a tax rate that will put the county’s 2005 budget into a deficit.”

The correct rate, said Griggs, is 11.322.

The worst example of undertaxation, said Griggs, appears to be by the city of Norcross. According to officials, $4,958,288 in property tax dollars will be needed to fully fund the city’s $7,291,600 budget. However, the city’s adopted rate of 6.780– the same rate as in 2004– will only generate about $3.1 million in tax revenue, a $1.8 million shortfall.

According to Griggs, the western Gwinnett city could be on the doorstep to a dire financial situation.

“If Norcross’s current budget is an accurate projection of revenues and expenditures, the city will experience a significant deficit this year,” said Griggs. He said that the mathematically correct rate is 10.813.

Griggs said that elected officials’ failure to “do the math” is not unusual. His research indicates that over nine out of 10 Georgia taxing authorities (cities, counties, school boards) adopt mathematically-incorrect millage rates each year. The majority of those taxing authorities adopt arbitrarily HIGH millage rates, resulting in an overcollection of tax revenue that sometimes reaches into the millions of dollars. In other words, those Georgia taxpayers pay MORE than necessary to fully fund the respective budgets.

Oftentimes, elected officials adopt incorrect rates for “political’ reasons, such as the fear of taxpayer revolt against a millage increase. Such was the case, Griggs said, for the County Commission. Earlier this year, the Finance Dept. staff recommended that the Commission adopt the mathematically correct rate (11.322). The board instead chose to maintain the previous year’s rate rather than “raise taxes.”

Griggs also noted that the Gwinnett Tax Commissioner’s Office web site details the correct calculation in its definition of “millage.” He knows because the Tax Commissioner recently updated the site with his definition.

“They almost had it right,” said Griggs. “I just added a few additional details.”

Griggs, a former Board of Equalization Chairman, discovered that there is currently no state law that requires taxing authorities to adopt mathematically accurate millage rates by the process that he was taught by the state Department of Revenue.

“Your city, county or school board can set the tax rate at any level it chooses,” said Griggs, “regardless of how much money it actually needs for the budget.” In his opinion, the failure to adopt mathematically correct tax rates is tantamount to lying to the taxpayers.

“Each year, your elected officials tell you that they need ‘X’ number of your hard-earned dollars when they approve the annual budget,” explained Griggs. “Then they adopt a tax rate that takes more from you than they told you that they needed. That’s just dishonest.”

Griggs said that the “dishonesty” is more often the result of “innocent ignorance” rather than a willful intent to deceive.

The correct procedure for calculating the millage rate is taught by the state Department of Revenue to newly-appointed Board of Equalization members and county Tax Commissioners, appraisers and assessors across the state. Every county Tax Commissioner uses this procedure to calculate individual property tax bills. However, the procedure is NOT part of the basic training for newly-elected City Council members, County Commissioners and Board of Education members, the very people who adopt the rates.

“Most elected officials do not know how to calculate the rate, so they adopt the highest rate that the voters will accept,” said Griggs. “It becomes a political decision rather than a simple math problem.”

Griggs is advocating a change in state law which, he says, will result in an immediate tax cut for a majority of Georgia property owners including many in Gwinnett. He wants the law to require city, county and school officials to simply “do the math.”

Griggs said that he is now seeking sponsors for his bill and educating lawmakers on the property taxation process. He has begun contacting members of Gwinnett’s predominantly Republican legislative delegation, hoping that they will carry the tax rate bill to approval. To date, however, Democrat State Senator Curt Thompson has been the only local legislator to show any interest.

“Curt understands the value of this important legislation,” said Griggs. “He is committed to promoting honesty in the property taxation process.”

According to Griggs, bills regarding revenue issues must begin in the State House of Representatives.

The primary source of information supporting his effort can be found at the web site, www.millagerate.com. The site includes an explanation of the millage calculation, analyses of millage rates from across the state, as well as the text of Griggs’ draft legislation.

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Gwinnett data online: www.millagerate.com/gwinnett/

How to calculate the millage rate: www.millagerate.com/howto.htm

Draft legislation: www.millagerate.com/law/bill.htm

Additional advantages & benefits: www.millagerate.com/benefits.htm