I have been thinking about this for over a year now, and I think may have written a post about it last year. I gave some thought to putting it off given the current climate and fear around the corona virus. However, I kind of think that maybe we could use another more normal subject to discuss. I do want to say that I hope all these drastic measures will help us return to normal very soon. Additionally, if you live here in the area, I hope that you will consider visiting some of our local venues to support our business owners. They rely heavily on the students and the university to make a living and they will be impacted by this immediately. If you still want to stay home, maybe consider ordering take out from your favorite place. My point is to not forget our local businesses as we sort through this current difficulty.
Alright, back to the real subject I want to discuss. First, let me say that this is not meant to point a finger at anyone on the school board or any other elected official. My purpose is to inform you as a local real estate professional because quite frankly I don’t think most people understand their property taxes. As a real estate broker, it is important that myself and our agents are a resource to our clients and the public for that matter when it comes to real estate. If we cannot do that, then we are not good at our job. That being the case, I think more of you should take a closer look at your bill and consider my points below.
Here is a brief rundown or explanation of how our property is taxed in Clarke County:
- The county asses a value on your property each year based on recent market sales.
- From there a millage rate is used with your property value to calculate your taxes.
- Our millage rate is currently 33.95 and has been since 2016 or so.
- This tax revenue is used for schools and as part of our overall county budget.
- GA State Law Caps School allotment at 20 mills (Clarke County is at 20 Mills).
- From there the county adds on top of the 20 mills to achieve the full rate (currently 33.95).
*keep in mind the true rate is higher, but this accounts for a sales tax credit
This money is collected and used as part of the overall budget for the county. Below is a graph for last year’s operating revenues. (this information is available on the tax commissioner website)
As you can see, the property taxes are a major portion and they are very important to our community. Paying taxes is the cost of having a society, and I think we all understand that to be true. But here is where I start to get a little curious as to your property tax money. See the graph below that illustrates the increases in revenue from 2016 to 2019. (this information is available on the tax commissioner website)
As you can see above, our revenue on property tax has increased an average of 7% each year since 2016. In many ways, this is fantastic for our community. This means our properties are appreciating and owners are gaining equity in their home or other properties. On the other hand, this does have a negative impact on some owners. That impact is the increased cost to own property. I referenced a random property in the 5 Points area that has not been improved and remains a modest and nice ranch style home. Keep in mind, this property has not undergone a renovation or been torn down and built back new. No Improvements and No Added Square Footage. Below is a rundown of the taxes on this property from 2016 to 2019:
Year Millage Rate Property Taxes
2016 33.95 $3,930.46
2017 33.95 $4,196.00
2018 33.95 $5,540.00
2019 33.95 $5,998.00
This property which has not been improved in anyway has seen a $2,000 increase in taxes and they will likely go up again in 2020. This is a modest example because improved properties have drastically increased, but overall, most areas of the county have seen increased taxes. Nevertheless, the millage rate has remained the same while our county budget seems to increase almost perfectly with new revenue.
So, there’s my point. We have more and more people paying increased taxes which are caused by historical gains in real estate value. Yes, that is a good thing, but it impacts property owners by increasing their monthly costs and that can be a strain to many people. In many cases, these taxes result in higher rent levels as landlords pass through some of this cost to renters. I know there are ideas being discussed to alleviate the burden on owners that might meet certain criteria for some tax relief. But it seems to me if $50,000,000 was enough in 2016 why couldn’t $55,000,000 be enough in 2019?
I think it is time we asked our school board and other officials to consider a modest roll back on the millage rate. If this increased revenue is greatly helping something in our community of which I am unaware, I will be glad to hear it. But given the strength of our real estate values, I think we should consider reducing the cost on our tax payers to some degree.
I love our town and I currently have all three of my children in Clarke County Schools. So, as a parent and a citizen these taxes do matter to me and I want to be taxed and pay my share. But I also want people to be more aware of things like this and then make their own decisions on the matter. In meantime, wash your hands and don’t be afraid to contribute to our sales tax revenue during this unprecedented time.