Why The Tax Freeze Must End
I’ve been a property tax payer in Muscogee County since 2004. This is also the year I began my career as a REALTOR. It doesn’t matter how I explain the tax freeze to new clients when they are debating over which county to reside in. They always ask me the same question, “How is this fair?”
IT’S NOT. Here are some facts you might find interesting:
- 65,000 Homestead Properties in Muscogee County are currently Frozen
- 29,000 pay less than $100 per year (15,000 of them pay less than $50)
- 60% of your tax bill goes to the Muscogee County School Board
- Our School Millage Rate 23.37 is the 3rd Highest in the State
- GA’s average Millage Rate is 30 mills (school + county)
- Muscogee County Millage Rate is above 40 mills in some areas
- Commercial Property Owners tax bill is equivalent to 3 months rent
If property values remain frozen, then our Millage Rate (property tax rate) can never be reduced. This is an unfair burden to Commercial Property Owners and New Residents. We are sending residents to our surrounding counties. They all may work in Muscogee County, but they don’t live in Muscogee County.
I used this analogy with a group a few weeks ago:
I own a bar. I’ve been giving you and many other locals FREE Drinks for 20+ years. All my new customers pay full price for their drinks. I’m scared to raise prices on new customers because I don’t want to run them off, but it’s difficult to cover my operating expenses and provide quality service with so many FREE Drinkers. I’m close to going out of business.
If you have been drinking for FREE for 20 years, I suggest that is long enough. If you don’t want to pay, then you don’t have to stay.
We need to support Mayor Tomlinson’s plan.
We have 2 Local Option Sales taxes. Our freeze is not the problem, The problem is spending and real estate people like Bickerstaff need the freeze lifted so that they can implement their tax allocations districts which will make the homeowners in those districts sharecroppers to the banks and only the banks and developers like Reynold Bickerstaff will make the money. KEEP THE FREEZE, REAL ESTATE IS THE DEMON THAT IS DRIVING THIS BUS.
THIS IS WHY THEY NEED TO LIFT THE FREEZE. BECAUSE THEY WERE DID NOT HAVE A FORUM WHEN THE TAX ALLOCATION DISTRICTS OR REDEVELOPMENT POWERS WERE PASSED. THEY WERE SLICK EVEN THEN AND CALLED IT REDEVELOPMENT POWERS INSTEAD OF TAX ALLOCATION DISTRICTS.
2010 Georgia Code
TITLE 36 – LOCAL GOVERNMENT
PROVISIONS – PROVISIONS APPLICABLE TO MUNICIPAL CORPORATIONS ONLY
CHAPTER 44 – REDEVELOPMENT POWERS
§ 36-44-15 – Determining tax millage rate; no freeze to ad valorem tax millage
O.C.G.A. 36-44-15 (2010)
36-44-15. Determining tax millage rate; no freeze to ad valorem tax millage
For the purpose of fixing the tax millage rate to fund the annual budget of each political subdivision or county or independent board of education having the power to levy taxes or set ad valorem tax millage rates on property located within a tax allocation district, which has consented to the inclusion of its ad valorem property taxes for the computation of tax allocation increments as provided in Code Section 36-44-9, the taxable value of property subject to ad valorem property taxes within a tax allocation district shall not exceed the tax allocation increment base of the district until the district is terminated. Nothing in this chapter shall be construed to freeze the ad valorem tax millage rate of any political subdivision or county or independent board of education consenting to the inclusion of its ad valorem property taxes as a basis for computing tax allocation increments, and any such rate may be increased or decreased at any time after the creation of a tax allocation district in the same manner and under the same authority that such rate has been previously fixed by such political subdivision or county or independent board of education.
Nadine, thank you for reading and posting your opinion. It seems you believe TADs are bad for citizens and the government. Nothing could be further from the truth. I’ll post some information next week on TADs(tax allocation districts).
I am waiting on your response. http://chicagoinspectorgeneral.org/major-initiatives/budget-options/2011-budget-options-online-version/revenue-options/property-taxes-eliminate-all-tax-increment-financing-districts/
I lived this once. I thought TADs was best thing since lemonade. They are going to bankrupt this city. YOU KNOW THAT TADS ARE WORTHLESS as long as we have the freeze. YOU WILL BENEFIT BECAUSE YOU ARE AN INVESTOR.
TADs are not going to bankrupt our city Nadine.
The TADs currently approved have very few residential properties located inside their boundaries that contribute significant tax revenue.
I am curious. If 65,000 property owners enjoy a tax freeze, how many property owners are paying “current” rates? What is the estimated dollar amount of taxes being lost? I would venture to guess that the 29,000 and 15,000 who are receiving the greatest benefit of the tax freeze are elderly since they have been in the same home for many years to have such a low tax bill. Although their home’s value has appreciated, I wonder how much? It seems as though more information is needed in order to determine if unfreezing taxes is really a good thing or cutting expenses/spending is a better option. I would love to see the numbers….
Alicia, 65,000 residential properties in Muscogee County have been filed as Homestead Valuation Freeze Exemption. This exemption will freeze the valuation of property at the base year valuation for as long as the homeowner owns and resides on the property. I don’t have an estimated dollar amount of lost taxes, due to values being frozen, but I will continue to collect data on our tax digest. When I have more numbers to help explain the disparity, I’ll share them with you. Thank you for commenting and asking good questions.
If the freeze is lifted and then the “grandfather clause” is ruled unconstitutional my taxes will go up to a point that my wife and I can not afford to live in the house we have owned for 45 years. The school board is already sticking it to us. See O.C.G.A. 48-5-52. This indicates that if you are over 65 and your residence acreage is less than 10 acres you are not subject to school advalorum taxes. The tax office replies that since we are a consolidated government it does not apply. It applies only to counties. This to me is “leagize interpretation ” by bureaucratese and not common sense. The city government does not need more money, they need better managers. Do we really need 3 city managers?
If it is ruled unconstitutional, which it is not, we would revert to the same tax system we currently have. No one will be forced out of their home.
The following (in blue font) is copied from a missive published by Reynolds Bickerstaff regarding “Why the Freeze Must End”.. I’ve addressed his points using *** to designate my words
I’ve been a property tax payer in Muscogee County since 2004.
Then, like me, you bought at the height of the bubble..appeal your evaluation.
This is also the year I began my career as a REALTOR. It doesn’t matter how I explain the tax freeze to new clients when they are debating over which county to reside in. They always ask me the same question, “How is this fair?”
*** In 2003, I bought 6817 Copper Oaks Rd for $349,900.00,,,The house next to me, 6821 Copper Oaks Rd, , with similar sq ft and same two level construction, has been sold twice in the past 16 months (and on the market as we speak sold in estate sale in 2014$262,500.00 and “flipped” for $323,000. in 2015) What’s “fair” about changing market conditions?
IT’S NOT. Here are some facts you might find interesting:
65,00 Homestead Properties in Muscogee County are currently Frozen
*** I assume you mean 65,000.. but please clarify “Homestead”..
29,000 pay less than $100 per year (15,000 pay less than $50)
*** Let’s parse this a bit.. I’d like a list of such properties .. I do know that residents of luxury condos at 1201 Front Ave are paying ridiculous taxes on a “historic exemption loophole”
In fact, I just looked up the units 201 through 220, and the highest property tax paid is $160.44. Item Unit 205 owned by Stephen and Kent Butler valued at $293K. pays property taxes of $135.09 for theirs. Ironically, the Butlers also own 2 parking spaces at the condo parking garage that are valued at $12K each and taxed at $198.24 each. Imagine that.. the Butlers pay more in taxes on two parking spaces than they do for their condo. The Butlers also own another private home in Columbus with a H1 homestead exemption..
While I’m talking about the 1201 Front Ave Eagle & Phenix condo. the first 20 units pay from as low as $1.11 in annual property taxes to the high of $135.09 for the Butlers. What’s real revealing is that 8 of the 20 units are owned by out-of-town people from as far away as Hawaii, Washington State and New York.. One of this 20 unit group is also owned by a LLC . The total.. TOTAL property taxes paid by the 8 out-of-town owners is
$564.19, and the LLC owned unit pays $65.42 in taxes. Think about this,, those out-of-towners are paying less in taxes than if they paid the hotel occupancy taxes while they visit. Someone should also check if people are renting out their units..At least one Columbusite owns 2 different units at the E & P Condos.
60% of your tax bill goes to the Muscogee County School Board
Our School Millage Rate 23.37 is the 3rd Highest in the State
And 5 mils is given for running the Museum.. WHY? The Museum can take care of itself through donations.. besides, the MCSD does not give the Museum all of the tax dollars collected in that extra 5 mils that the legislature added on the 20 mil cap it was under.
GA’s average Millage Rate is 30 mills (school + county)
Muscogee County Millage Rate is above 40 mills in some areas
It’s funny.. not one mention of lowering the millage rate is included in the Mayors “plan”
I have suggested on several occasions that if Council would offer a plan such as declaring a two year moratorium on a cap of the current property tax revenues so it could get all properties assessed at current market values, then adjust the millage rate for all properties to collect only that amount for one year, I would be interested in talking about removing the freeze. As it stands, the Mayor’s plan basically wants to keep the high taxed property as it is, and raise everyone else’s.
Commercial Property Owners tax bill is equivalent to 3 months rent
***And? A $300K mortgage on a home is going to be inn the $1500.00 a month range and the taxes on an annual basis will be about $5,000. That’s more than than 3 months worth of mortgage payments.
*** As you can see,, there are arguments for both keeping and removing it, but.. BUT there’s nothing in the Mayor’s plan that addresses “fairness” – There should be a minimum and maximum tax charged. There should be proposals for churches and colleges to pay fees for fire and police services, and all homestead exemptions other than H1 should be eliminated.
Hal, yes I left off a 0 in 65,000. Thank you for catching my error. What’s fair about changing market conditions? The fact that the conditions change, is what creates fairness.
This is a fun tax tool to help you understand valuations http://www.qpublic.net/ga/muscogee/est.html
If your property value wasn’t frozen, it would change with the market. In the example you mentioned let’s use round numbers. Your property was valued at $350,000 when you purchased it in 2003 and properties in your neighborhood are now selling for $300,000 in 2015. If your value wasn’t “frozen” you could appeal the valuation, based on current market conditions and receive a reduction in your tax bill.
Eagle and Phenix Mill Lofts values were frozen as an incentive to spur development. I believe their property taxes will adjust to 50% fmv next year and 100% fmv in 2017 creating a substantial increase in property tax revenue.
I’ll continue to collect data on this subject and share it with you. Thank you Hal for commenting and raising good questions.
I hate to be the one to break it to Reynolds, but NO ONE is drinking free. 100% of home owners enjoy the freeze. Paying the tax based on the price you PAID for your house is “fair” to everyone. On the flip side paying based on what my neighbors paid is unfair. This is another move to remove the freeze for EVERYONE and enrich the government coffers yet again. Government is NOT the answer. Government needs to contract NOT expand.
Thank you for taking time to read my post and share your comments Beth.
I in no way shape or form am enjoying this freeze. Since 2008 when the market crashed I have been paying taxes an estimated 120k of home value that I no longer have. Only recently have I been made aware of this situation and been in contact with our beloved tax division to only be told that if I would like this problem fixed I could DIE. Yes you read that correctly, I was told to DIE by the tax office and then my property taxes will reflect the actual value of my home. Simp,e math will show that since 2008 our beloved govt has stolen just shy of 20k from my bank account. Wouldn’t you like to have 20k sitting in your bank account right now, me too! I am subsidizing a wealthy family in Green Island Hills. They are paying taxes on a 1/4 of what their property is worth yet get to enjoy all the “advancements” my tax dollars are paying for.
I agree Mike. Our property owners need a tax system that creates equitable ownership for all residents. Thank you for reading this post and commenting.
The proposal on the ballot abolishes the freeze for all new buyers as of Jan. 1, 2017. What is fair about that? Wouldn’t a new buyer have standing to sue because other homeowners have the freeze, but it was forbidden for him. Nothing in the ballot proposal addresses lowering the millage rate.
Thank you for sharing your comments. It takes 14 years for a home owner to benefit from the Freeze. The average homeowner moves every 7-10 years. Would you like for me to arrange someone to meet with you and answer more of your questions? If I can help, please let me know.
Let’s parse your contention that it takes 14 yearts for a homeowner to benefit:
Bought my home here in 2003.. taxes have been vacillating at $5,200 +/- since.. The home I sold in Harris County which was bigger and lake front at the same price, had taxes then at $1,900.. in 2016, the taxes, with out a freeze, had risen to $2,600.. a 37% increase. but still less than half the taxes I pay every year in Muscogee..
Hal, I don’t know the details of your Harris County Property: purchase date, purchase price, sales price, sales date, and if you or the current owner have made improvements since your original purchase. So I cannot comment on the point you are trying to make with your comparison.
Same value housing…13 years later. Without the freeze, I could be paying 37% higher taxes on my Columbus home. As it is, my taxes could easily be over $7100 while my same priced home in Harris Cty is now only $2600
CHICAGO 09/02/2015, 08:46pm
Emanuel to seek $500 million property tax hike
CHICAGO HAS 227 TADS AND BECAUSE THEY DO NOT HAVE THE FREEZE THE CITY CAN RAISE TAXES TO MAKE UP THE DIFFERENCE FOR THE MONEY THAT IS GENERATED BY THE TADS. MONEY GENERATED BY THE TADS MUST STAY WITHIN THAT TAD UNTIL THAT TAD IS PAID OFF. WE HAVE THE FREEZE WHICH MEANS THAT WE HAVE POWER OVER OUR PROPERTY TAXES AND NOT THE CITY. IF WE VOTE FOR THE THAW, WE WILL BE GIVING THE POWER OVER OUR PROPERTY TAXES TO THE CITY. THEY CAN RAISE THE PROPERTY TAXES WHENEVER THEY WANT TO. THEY WILL, TO COVER THE COST OF THE PROPERTY TAXES LOST FROM THOSE 3 TADS THAT THEY JUST CREATED. THE 2 MILLION DOLLARS THAT WILL COME IN FROM THE BENNING INDUSTRIAL PARK WILL GO TO THE CITY BUT THE 40 MILLION DOLLARS PROJECTED TO BE GENERATED BY THE PARK WILL STAY IN THE PARK. THE CITY WILL NOT GET THAT MONEY BUT WILL HAVE TO STILL PROVIDE THE SERVICES. I READY TO DISCUSS THIS WITH ANYBODY. THE TADS AND LIFTING THE FREEZE GO HAND IN HAND.
So….are you saying we should thaw the Freeze and not have TADs?
Bickerstaff, Phenix City does not have the freeze so why are most of their citizens working in Columbus?
Because most of the jobs this region are located in Columbus, which is an easy commute from Lee & Russell County, where residential properties are more affordable. You can buy more house and pay lower property taxes in Lee & Russell County than in Muscogee.