the property tax process

CITY OF ATLANTA

Property Taxes and the Millage Setting Process

Tanya S. Jackson, Office of Budget & Fiscal Policy 6/11/2008

PROPERTY TAXES AND THE MILLAGE SETTING PROCESS

The property tax process involves two separate functions. First, property values must be established. Second, the millage is set so that tax revenues can be projected in order to balance the budget. There are many entities involved in the property tax process, a process that is largely governed by O.C.G.A 48-5-32. Property taxes are levied to make up the difference between all other revenues received, and the total revenues needed to fund essential county, city, and board of education services. Property taxes are the only “flexible” major source of revenue for counties, cities and school boards of education. Property taxes are based on the fair market value of a property relative to the value of all other property in the county. Key Roles of Government County Government Board of Commissioners. State law dictates that the Board of Commissioners for county government appoint the Board of Tax Assessors. In addition, state law states that the Board of Commissioners must use county funds to finance and administer the Board of Tax Assessors and all tax appraisal, assessment, collection and appeal activities. County commissioners do not have any role in the appraisal or assessment of property other than making appointments and funding the process. Board of Tax Assessors. The Board of Tax Assessors for each county is appointed by the county commissioners, but operates independently by law. Assessors are appointed to fixed terms, as defined by state law, and cannot be removed by commissioners unless they fail to carry out their duties. The Board of Tax Assessors manages an appraisal staff that is trained by the state and keeps property values current as mandated by state law. Tax Commissioner. The Tax Commissioner is an elected county constitutional officer responsible for compiling the tax digest for state review and approval. The Tax Commissioner sends tax bills and collects taxes. Also, the Tax Commissioner collects taxes for counties, school and cities that levy property taxes. Board of Equalization. If you disagree with the assessment of your property, the Board of Equalization listens to taxpayer’s appeals from the decisions of the Board of Assessors. The Board of Equalization is appointed by the grand jury. For those appeals with merit, the Board of Equalization makes adjustments to the value of property.

City Government Cities also levy property taxes, though at a much lower rate than counties, as cities have diverse revenue streams including electric and gas utilities. City property taxes are levied using the county digest. Many cities contract with the county for collection of their property taxes. Local Board of Education Each Board of Education specifies the amount of money needed to fund the schools. The Board of Education then specifies the millage rate for education to the county commissioners. The Board of Commissioners is required by the state to accept and levy the school millage. Each county, city and board of education adopts an operating budget and sets a millage rate annually. The millage rate, when applied to the appraised value of a parcel of property, determines the taxes due. The property tax levied is the difference between the total expenditure needs and total incoming revenues. What is the Millage and how is it Used? The millage rate is a factor that, when applied to the appraised value of a parcel of property, determines the tax due. A mill equals $1 of tax for every $1,000 of value. Exhibit A Appraisal value of home $240,000 Assessed at 40% (state law) $ 96,000 Less any exemptions (homestead + state tax relief grant) ($ 23,000) Taxable value $ 73,000 $73,000 X 7.67 mills (general) $ 559.91 $73,000 X 1.18 mills (bond) $ 86.14 $73,000 X 0.50 mills (parks) $ 36.50 Total general, bond & park tax levy $ 682.55 The property tax revenues have to cover the gap between the planned expenditures and forecasted revenues from sources other than the property taxes. Tax Digest The tax digest is the total taxable value (i.e. fair market value) of all property, real and personal, in the county. State law requires counties to keep tax digests current. Therefore, property values must be kept current. The Board of Tax Assessors must periodically administer revaluations, by law, to keep the digest at fair market value.

State’s Role The state is involved throughout the entire property tax process.

The General Assembly - makes tax law The Governor - the state’s chief policy maker Department of Revenue - approves the digest and writes rules to comply

with state law The state creates tax laws requiring county governments to formulate a county tax digest and keep property at fair market value, through the Board of Tax Assessors. The state approves the property appraisals set by the Board of Tax Assessors. The state gets a standing quarter-mill levy on all property in Georgia. Money for the state levy goes into the state treasury. None of the quarter-mill is used for local tax administration. The state conducts an annual sales ratio study of every county. A sales ratio study compares property appraisals to actual property sales in each county. The purpose is to make sure the value of each county’s digest falls within 36% to 44% of fair market value. If the state finds appraised property values under market value, the state levies a fine against the county until the digest values are increased by the local Board of Tax Assessors, to bring the digest in line with the state’s mandate. Generally, Tax Assessors reappraise the county digest in three-year cycles. Some assess one third of the parcels per year, while others conduct a countywide revaluation every three years. Advertisements O.C.G.A. 48-5-32 states that at least two weeks prior to setting the millage rate, a notice must be advertised. The advertisement must contain the assessed taxable value of all property, by class and in total and the proposed millage rate for the current calendar year and the preceding five years. The date, time and place where the levying or recommending authority will be setting its millage rate must also be included in the advertisement. See Exhibit B below:

Exhibit B O.C.G.A 48-5-32 48-5-32 (a) As used in this Code section, the term: (1) ‘Levying authority’ means a county, a municipality, or a consolidated city-county governing authority or other governing authority of a political subdivision of this state that exercises the power to levy ad valorem taxes to carry out the governing authority’s purposes. (2) ‘Recommending authority’ means a county, independent, or area school board of education that exercises the power to cause the levying authority to levy ad valorem taxes to carry out the board’s purposes. (3) ‘Taxing jurisdiction’ means all the tangible property subject to the levy of a specific levying authority or the recommended levy of a specific recommending authority. (b) Each levying authority and each recommending authority shall cause a report to be published in a newspaper of general circulation throughout the county: (1) At least two weeks prior to the certification of any recommending authority to the levying authority of such recommending authority’s recommended school tax for the support and maintenance of education pursuant to Article VIII, Section VI, Paragraph I of the Constitution; and (2) At least two weeks prior to the establishment by each levying authority of the millage rates for ad valorem taxes for educational purposes and ad valorem taxes for purposes other than educational purposes for the current calendar year. Such reports shall be in a prominent location in such newspaper and shall not be included with legal advertisements. The size and location of the advertisements shall not be grounds for contesting the validity of the levy. (c) The reports required under subsection (b) of this Code section shall contain the following: (1) For levying authorities, the assessed taxable value of all property, by class and in total, which is within the levying authority’s taxing jurisdiction and the proposed millage rate for the levying authority’s purposes for the current calendar year and such assessed taxable values and the millage rates for each of the immediately preceding five calendar years, as well as the proposed total dollar amount of ad valorem taxes to be levied for the levying authority’s purposes for the current calendar year and the total dollar amount of ad valorem taxes levied for the levying authority’s purposes for each of the immediately preceding five calendar years. The information required for each year specified in this paragraph shall also indicate the percentage increase and total dollar increase with respect to the immediately preceding calendar year. In the event the rate levied in the unincorporated area is different from the rate levied in the incorporated area, the report shall also indicate all required information with respect to the incorporated area, unicorporated area, and a combination of incorporated and unicorporated areas; (2) For recommending authorities, the assessed taxable value of all property, by class and in total, which is within the recommending authority’s taxing jurisdiction and the proposed millage rate for the recommending authority’s purposes for the current calendar year and such assessed taxable values and the millage rates for each of the immediately preceding five calendar years, as well as the proposed total dollar amount of ad valorem taxes to be recommended for the recommending authority’s purposes for the current calendar year and the total dollar amount of ad valorem taxes levied for the recommending authority’s purposes for each of the immediately preceding five calendar years. The information required for each year specified in this paragraph shall also indicate the percentage increase and total dollar increase with respect to the immediately preceding calendar year; and (3) The date, time, and place where the levying or recommending authority will be setting its millage rate for such authority’s purposes. (d) The commissioner shall not accept for review the digest of any county which does not submit simultaneously a copy of such published reports for the county governing authority and the county board of education with such digest. In the event a digest is not accepted for review by the commissioner pursuant to this subsection, it shall be accepted for review upon satisfactory submission by such county of a copy of such published reports. The levies of each of the levying authorities other than the county governing authority shall be invalid and unenforceable until such time as the provisions of this Code section have been met. Source: http://www.legis.state.ga.us/legis/2003_04/gacode/48-5-32.html

PRESENTED IN ACCORDANCE WITH O.C.G.A. SECTION 48-5-32.1 - M & O FUND ONLY

COUNTY TAXING JURISDICTION

REASSESSMENT OF OTHER CHANGESEXISTING REAL PROP TO TAXABLE DIGEST

22,127,879,717 2,745,780,260 2,205,475,912 27,079,135,8892,306,465,121 89,241,802 2,395,706,923

MOTOR VEHICLES 844,793,510 26,582,130 871,375,640 MOBILE HOMES 378,646 -9,046 369,600 TIMBER -100% 0 0 0 HEAVY DUTY EQUIP 98,846 -23,873 74,973

GROSS DIGEST 25,279,615,840 2,745,780,260 2,321,266,925 30,346,663,025 EXEMPTIONS 1,929,106,735 389,442,532 2,318,549,267 NET DIGEST 23,350,509,105 2,745,780,260 1,931,824,393 28,028,113,758

(PYD) (RVA) (NAG) (CYD)2007 MILLAGE RATE >>> 7.09 7.67

ABBREVIATION AMOUNT FORMULA

PYD 23,350,509,105RVA 2,745,780,260NAG 1,931,824,393CYD 28,028,113,758 (PYD+RVA+NAG)

PYM 7.09Millage Equivalent of Reassessed Value Added ME 0.69 (RVA/CYD) * PYM

RR 6.39 PYM - ME

Total Ad Valorem Tax Levied for 2008 Tax Year 179,183,731 CYD * RR/1000Total Ad Valorem Tax Levied for 2007 Tax Year 165,485,058 PYD * PYM/1000

13,690,839 NAG * PYM/1000

If the 2008 Proposed Millage Rate for this Taxing Jurisdiction exceeds the Rollback Millage Rate Rollback Millage Rate 6.39computed above, this section will automatically calculate the amount of increase in property 2008 Millage Rate 7.67taxes that is part of the notice required in O.C.G.A. Section 48-5-32.1(c) (2) Percentage Increase 19.97%

I hereby certify that the amount indicated above is an accurate accounting of the total net assessed value added by the reassessment of existing re property for the tax year for which this rollback millage rate is being computed

___________________________________ _______________ Chairman, Board of Tax Assessors Date

I hereby certify that the values shown above are an accurate representation of the digest values and exemption amounts for the applicable tax year

___________________________________ _______________ Tax Collector or Tax Commissioner Date

I hereby certify that the above is a true and correct computation of the rollback millage rate in accordance with O.C.G.A. Section 48-5-32.1 for the taxin jurisdiction for tax year 2008 and that the final millage rate set by the authority of this taxing jurisdiction for tax year 2008 is __________

____ If the final millage rate set by the authority of the taxing jurisdiction for tax year 2008 exceeds the rollback rate, I further certify that the required advertisements, notices, and public hearings have been conducted in accordance with O.C.G.A. Sections 48-5-32 and 48-5-32.1 as evidenced by the attached copies of the published five year history and current digest advertisement, the "Notice of Intent to Increase Taxes" showing the times and places when and where the required public hearings were held, and a copy of the press release provided to the local media.

____ If the final millage rate set by the authority of the taxing jurisdiction for tax year 2008 does not exceed the rollback rate, I further certify that the required five year history and current digest advertisement has been published in accordance with O.C.G.A. Section 48-5-32 as evidenced by the attached copy of such advertised report.

DESCRIPTION 2007 DIGEST 2008 DIGEST

REAL

COMPUTATION OF MILLAGE RATE ROLLBACK AND PERCENTAGE INCREASE IN PROPERTY TAXES FOR YEAR 2008

Fulton/Dekalb Consolidated City of Atlanta

INFORMATION FOR PORTIONS OF THIS SECTION MUST BE ENTERED

2008 PROPOSED MILLAGE RATE >>>THIS SECTION WILL CALCULATE AUTOMATICALLY UPON ENTRY OF INFORMATION ABOVE

DESCRIPTION

PERSONAL

2007 Millage Rate

Rollback Millage Rate for 2008

2007 Net Digest Net Value Added-Reassessment of Existing Real PropertyOther Net Changes to Taxable Digest2008 Net Digest

CHECK THE APPROPRIATE PARAGRAPH BELOW THAT APPLIES TO THIS TAXING JURISDICTION

________________________________ _______________________ _____________ Signature of Responsible Party Title Date

Allowable Revenue Growth Without Public Hearings

COMPUTATION OF PERCENTAGE INCREASE IN PROPERTY TAXES

CERTIFICATIONS

The City of Atlanta has three levies for property taxes: Operating Levy, Bond Levy, and the Parks Levy.

*Proposed Millage Rate for Operating Levy

A property tax bill consists of taxes levied by each of the following entities: The State of Georgia, Fulton County (or DeKalb County), Atlanta Public Schools, and the City of Atlanta. It is important to note that the City of Atlanta’s property taxes account for less than one-quarter of the total annual bill. In other words, of every property tax dollar collected, 21 cents goes to the City of Atlanta. The remaining 79 cents support the Atlanta Public School System (54 cents), Fulton County (24 cents), and the State of Georgia (1 cent).

City of Atlanta Property Tax Basics

2008 — Increase over prior year

LEVY PURPOSE

2007 MILL RATE

(Proposed) 2008

MILL RATE Change %Change

Operating To pay for general operating expenses of the City 7.09 7.67* 0.58 8.2%

Bonds To pay debt service on General Obligation Bonds issued for various City purposes 1.33 1.18 -0.15 -11.3%

Parks To fund expenses related to City of Atlanta Parks 0.50 0.50 0.00 0.00%

TOTAL 8.92 9.35 0.43 4.8%

Figure 1

Total Levy Comparison, 2006 - 2008

010203040

2006 Millage Rate 22.703 11.471 9.44 0.25 43.864

2007 Millage Rate 22.703 10.281 8.92 0.25 42.154

2008 Millage Rate 22.694 10.281 9.35 0.25 42.575

APS Fulton County City of Atlanta State of Georgia TOTAL

Figure 2

PREPARED BY THE OFFICE OF BUDGET & FISCAL POLICY

2008 Property Tax Facts

The formula used to calculate a rate payer’s property taxes owed is the Assessed Property Value (calculated at 40% of fair market value) minus exemptions (Basic Homestead, etc) multiplied by the millage rate. Figure 3 shows how property taxes are calculated. Figure 4 shows City of Atlanta property taxes for properties at various prices based on the 2007 actual and 2008 proposed City of Atlanta rates. Both exam-ples assume a basic homestead exemption of $15,000 and a state tax relief grant of $8,000 for a total of $23,000 in exemptions.

Calculating the City’s Property Tax

COUNTY CONTACTS

Fulton County Tax Commissioner 141 Pryor St, SW Suite 1085 Atlanta GA 30303 404-730-6100 Dekalb County Tax Commissioner 4380 Memorial Dr. Suite 100 Decatur GA 30032 404-298-4000

Fair Market Value 2007

Property Tax (8.92 mills)

(Proposed) 2008


Change % Change

$100,000 $151.64 $158.95 $7.31 4.82%

$200,000 $508.44 $532.95 $24.51 4.82%

$300,000 $865.24 $906.95 $41.71 4.82%

$240,000 651.16 682.55 $31.39 4.82%

Understanding Property Tax Roll-Backs

The Tax Payers’ Bill of Rights requires the City of Atlanta, the Atlanta Public Schools System, and the County to “roll-back” or decrease their property tax rates for reassessment or to otherwise advertise a tax increase. This means that if in one year the City collects more property taxes because of rising property values, then in the next year, the City must reduce its property tax rate such that the total taxes collected does not exceed that of the previous year.

Fair Market Value X 40% =

Assessed Value —

Exemp-tions X

Millage Rate =

Property Tax

$240,000 X 40% = $96,000 — $23,000 X .00935 = $682.55

Figure 3

The City of Atlanta has rolled back the property tax rate each year from 2003 - 2007. From 2002 - 2007, the City’s property tax rates dropped 1.94 mills, or over 18%, since 2002.

For more information on how to read your tax bill, visit http://www.co.fulton.ga.us/ or http://www.co.dekalb.ga.us/

Figure 4

2008 Property Tax Facts

The formula used to calculate a rate payer’s property taxes owed is the Assessed Property Value (calculated at 40% of fair market value) minus exemptions (Basic Homestead, etc) multiplied by the millage rate. Figure 3 shows how property taxes are calculated. Figure 4 shows City of Atlanta property taxes for properties at various prices based on the 2007 actual and 2008 proposed City of Atlanta rates. Both exam-ples assume a basic homestead exemption of $15,000 and a state tax relief grant of $8,000 for a total of $23,000 in exemptions.

Calculating the City’s Property Tax

Fair Market Value 2007


(Proposed) 2008


Change % Change

$400,000 $1,222.04 $1,280.95 $58.91 4.82%

$500,000 $1,578.84 $1,654.95 $76.11 4.82%

$700,000 $2,292.44 $2,402.95 $110.51 4.82%

$600,000 $1,935.64 $2,028.95 $93.31 4.82%

$800,000 $2,649.24 $2,776.95 $127.71 4.82%

$900,000 $3,006.04 $3,150.95 $144.91 4.82%

$1,000,000 $3,362.84 $3,524.95 $162.11 4.82%

Fair Market Value X 40% =

Assessed Value —

Exemp-tions X

Millage Rate =

Property Tax

$1,000,000 X 40% = $400,000 — $23,000 X .00935 = $3,524.95

Figure 3

The City of Atlanta has rolled back the property tax rate each year from 2003 - 2007. From 2002 - 2007, the City’s property tax rates dropped 1.94 mills, or over 18%, since 2002.

For more information on how to read your tax bill, visit http://www.co.fulton.ga.us/ or http://www.co.dekalb.ga.us/

PUBLIC NOTICE The Atlanta City Council, does hereby publish the following presentation of the 2008 maintenance (M&O) tax digest along with history of tax for the past five years.

ATLANTA FULTON / DEKALB 2004 2005 2006 2007 2008 Real & Personal 18,079,641,500 18,777,475,198 20,827,115,568 23,366,124,664 28,818,454,665 Motor Vehicle 815,544,076 745,618,570 775,865,400 844,793,510 871,375,640Mobile Homes 340,097 496,223 208,390 378,600 369,600Heavy Duty Equip. 0 10,906 6,284 1,619 74,973Public Utility 762,167,398 738,215,278 741,464,961 765,954,287 656,388,147

Gross Tax Digest $19,657,693,071 $20,261,816,175 $22,344,660,603 $24,977,252,680 $30,346,663,025

Less Exemptions: City Operating & City Parks ($1,535,194,218) ($1,535,194,218) ($1,720,017,791) ($1,887,460,545) ($2,318,549,267) City Bonds ($172,776,420) ($286,062,961) ($265,191,136) ($336,812,014) ($624,802,481)Net Tax Digest: City Operating & City Parks $18,122,498,853 $18,726,621,957 $20,624,642,812 $23,089,792,135 $28,028,113,758 City Bonds $19,484,916,651 $19,975,753,214 $22,079,469,467 $24,640,440,666 $29,721,860,544

Millage Rates: City Operating(Gross) 13.54 12.46 12.43 12.49 14.04 Sales Tax Rollback (5.06) (4.66) (4.79) (4.96) (5.68) Millage Equivalent Rate (0.23) (0.16) (0.11) (0.44) (0.69) City Support Schools 0.00 0.00 0.00 0.00 0.00 City Operating(Rollback Rate) 8.25 7.64 7.53 7.09 7.67

City Parks 0.50 0.50 0.50 0.50 0.50 Millage Equivalent Rate 0.00 0.00 0.00 0.00 0.00 City Parks (Rollback Rate) 0.50 0.50 0.50 0.50 0.50

City Bonds 1.30 1.45 1.43 1.41 1.33 Millage Equivalent Rate (0.03) (0.02) (0.02) (0.08) (0.15) City Bonds (Rollback Rate) 1.27 1.43 1.41 1.33 1.18

TOTAL MILLAGE RATE 10.02 9.57 9.44 8.92 9.35

Total Tax Revenues Billed:

City Operating 149,510,616 143,071,392 155,303,560 163,706,626 $214,975,633 City Parks 9,061,249 9,363,311 10,312,321 11,544,896 14,014,057 City Bonds 24,745,844 28,565,327 31,132,052 32,771,786 35,071,795TOTAL TAX LEVY $183,317,709 $181,000,030 $196,747,933 $208,023,308 $264,061,485

NET CHANGE FROM PREVIOUS YEAR TAX LEVY(+ or -) City Operating $5,219,008 ($6,439,224) $12,232,168 $8,403,066 $51,269,007 Percent 3.62% -4.31% 8.55% 5.41% 31.32% City Parks $778,149 $302,062 $949,010 $1,232,575 $2,469,161 Percent 9.39% 3.33% 10.14% 11.95% 21.39% City Bonds $1,464,171 $0 $2,566,725 $1,639,734 $2,300,009 Percent 6.29% 15.43% 8.99% 5.27% 7.02%TOTAL TAX LEVY $7,461,328 ($2,317,679) $15,747,903 $11,275,375 $56,038,177TOTAL LEVY % CHANGE 4.24% -1.26% 8.70% 5.73% 26.94%

ATLANTA / DEKALB LIBRARY 2004 2005 2006 2007 2008Real & Personal $996,940,210 $1,081,426,303 $1,219,963,518 $1,259,015,887 $1,282,090,525Motor Vehicle 46,090,540 46,101,160 48,995,830 53,202,440 56,522,000Heavy Duty Equip. 0 10,906 0 0 5,720Public Utility 54,171,651 39,061,880 42,952,857 39,084,717 42,069,061Gross Tax Digest $1,097,202,401 $1,166,600,249 $1,311,912,205 $1,351,303,044 $1,380,687,306Less: Exemptions (115,222,600) (118,943,320) (124,265,666) (124,767,219) (132,771,637)Net Tax Digest $981,979,801 $1,047,656,929 $1,187,646,539 $1,226,535,825 $1,247,915,669Library Service Millage Rate 1.05 1.10 0.991 0.956 0.956Tax Levy $1,031,079 $1,152,423 $1,176,958 $1,172,568 $1,193,007

NET CHANGE FROM PREVIOUS YEAR TAX LEVY(+ or -)Tax Levy ($16,755) $121,344 $24,535 ($4,389) $20,439Tax Levy % Change -1.60% 11.77% 2.13% -0.37% 1.74%

ATLANTA FULTON / DEKALB 2004 2005 2006 2007 2008 Real & Personal $18,079,641,500 $18,777,475,198 $20,827,115,568 $23,366,124,664 $28,818,454,665Motor Vehicle 815,544,076 745,618,570 775,865,400 844,793,510 871,375,640Mobile Homes 340,097 496,223 208,390 378,600 369,600Public Utility 762,167,398 738,215,278 741,464,961 765,954,287 656,388,147Gross Tax Digest $19,657,693,071 $20,261,805,269 $22,344,654,319 $24,977,251,061 $30,346,588,052Less: Exemptions (172,776,420) (286,062,961) (265,191,136) (336,812,014) (624,802,481)Net Tax Digest: $19,484,916,651 $19,975,742,308 $22,079,463,183 $24,640,439,047 $29,721,785,571City School Millage Rate 0.109 0.106 0.104 0.054 0.054Millage Equivalent Rate (0.003) (0.002) (0.050) 0.000 0.000City School Bonds (Rollback Rate) 0.106 0.104 0.054 0.054 0.054

Tax Levy $2,065,401 $2,077,477 $1,192,291 $1,330,584 $1,604,976

NET CHANGE FROM PREVIOUS YEAR TAX LEVY(+ or -) Tax Levy $113,323 $12,076 ($885,186) $138,293 $274,393 Tax Levy % Change 5.81% 0.58% -42.61% 11.60% 20.62%

THE OFFICIAL LEVYING OF 2008 RATES WILL BE FRIDAY, JUNE 27, 2008, AT 9:30 A.M.THE MEETING WILL BE HELD AT THE ATLANTA CITY HALL, CITY COUNCIL CHAMBERS, SECOND FLOOR. 55 TRINITY AVENUE, S.W. ATLANTA, GEORGIA 30303.THE PUBLIC IS INVITED TO ATTEND AND COMMENTS ARE WELCOME.

Rhonda Dauphin Johnson Municipal Clerk City of Atlanta

the property tax process

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