Ballot questions produce tough decisions

A a trio of Constitutional Amendments that Georgia legislators placed on the November 5 General Election ballot will likely pass, leaving Fannin County leaders with tough decisions.

Those decision will come because the ballot questions make the legislators’ proposals sound like a win for taxpayers when that is not necessarily the case in Fannin County.

Amendments 1, 2 and 3 ask voters to approve a state-wide homestead exemption for property taxes, establish a tax court, and raise the tangible personal property tax exemption from $7,500 to $20,000.

While state legislators have stood firmly behind the ideas, local leaders view the proposed homestead exemption as the rest of Georgia catching up with Fannin County.

Commission Chairman Jamie Hensley and Chief Tax Appraiser Dawn Cochran echoed last week, “If we didn’t already have a local exemption, this would be great.” They were referring to an exemption that has been in place since the early 1980s in Fannin County.

They believe the state’s plan could easily result in a local millage rate increase.

The state plan has many moving parts, designed so taxable values for homeowners will not rise more than the inflation rate set by the state revenue commissioner.

However, property assessors will still be required to maintain a fair market value ratio.

“The state is putting a cap on how values can be taxed,” Cochran said. This would take a considerable amount of taxable values off Fannin County’s tax digest, resulting in less revenue generated by the current millage rate.

“You’ve got to make your checkbook balance,” Cochran said.

To generate the needed revenue to run the county and provide the same services as the prior year, the millage rate would have to be increased. Under the state’s plan, the responsibility for paying the taxes would simply shift among taxpayers.

Cochran and Hensley point to the county’s current system of taxation as a long established formula “to equally distribute the tax burden while allowing a millage rollback that still generates the money necessary to run the county,” Cochran explained.

Hensley said Fannin County’s taxation formula relies on property and personal property, both the county Special Purpose Local Option Sales Tax (SPLOST) and the Local Option Sales Tax.

Similarly, the Education SPLOST plays a huge role in the school system’s formula, along with the other mentioned taxes.

Not only does the state’s property tax plan move toward reducing property tax revenue, raising the personal property exemption would also hurt Fannin County’s revenue.

For example, there are a large number of boats in the county valued at more than $7,500 but less than $20,000, Cochran said. The revenue from that number would all drop off the tax digest. Cochran said, “That’s going to hit us hard.”

Fannin County has boasted one of the lowest millage rates in Georgia for years, while still providing services citizens demand. The rollback rate has been approved year after year for several years. “This proves Fannin County’s equal tax effort is working,” Hensley said.

The state’s plan offers two options, but neither seem to fit Fannin County.

The first would be to create a one cent local option sales tax, a FLOST as the state calls it.

Cochran explains that once created this tax would never go away.

Hensley points to the county’s current SPLOST and ESPLOST. Both must be renewed by voters.

In an economic downturn, voters could decide these taxes would have to “go away,” and vote against them. This would be devastating for the county, especially since about half of both the SPLOST and ESPLOST are paid by visitors. The need for the revenue from these taxes would then shift back to local property owners, Hensley warned.

The state’s FLOST would stay in place, but that same economic downturn that could bury one of the present local option taxes would decrease revenue from any similar one cent tax.

The county could also “opt out” of the state’s plan.

But since the state is promoting the plan as a “tax cut” for property owners, elected officials would be viewed as standing in the way of a tax cut and raising taxes. “That isn’t fair to us. Nothing could be farther from the truth,” Hensley said.

“The state’s plan gives county’s without a local exemption a great starting point, but we passed that starting point a long time ago,” Cochran said.