Bulloch County Manager Tom Couch is recommending that the Board of Commissioners not roll back its millage rate and so is issuing a notice, to comply with the Georgia Taxpayer Bill of Rights, of a pending 1 percent property tax increase.
In an interview and follow-up emails last week, Couch indicated that the county government will hold three required "tax increase" hearings, while he protests that the lack of a rollback does not amount to a tax increase in this case.
"After consulting individually with each commissioner, I have received consent to perform public due diligence, by advertising to hold the three required hearings," Couch said in an email. "I would like to be able to present credible information as to why the board should not decrease the millage rate and why the public notices are misleading with respect to a tax increase."
But the commissioners won't make a decision until Aug. 19, and it remains their decision to make, he added.
"They have merely granted me the courtesy to publicly explain my recommendation," Couch said.
The county has scheduled the first two hearings for noon and 6 p.m. on Aug. 12 and the final hearing for 8:30 a.m. on Aug. 19. Government boards legally may hold two of the three hearings on a single day and often do so.
The advertised rate of the tax increase is 1.03 percent, reflecting Couch's recommendation that the commissioners hold their millage rate at 10.44 mills, which has been the rate for several years. To avoid a tax increase announcement and hearings, they would have to roll back to 10.334 mills.
With most property assessed for taxes at 40 percent of its market value, the lack of a rollback would result in about $5.30 more tax on a $125,000 home - if the increase in appraised values applied to most homes.
But in fact, the tax assessment on most homes remains the same as last year, so their owners will see no tax increase at all, as officials have been busy explaining.
The Taxpayer Bill of Rights is a 1999 state law that requires local governments to announce a tax increase and hold three public hearings if millage rates remain the same but property revaluations result in increased revenue.
The complication this year, cited by both Couch and Troy Brown, the chief financial officer for the Bulloch County Board of Education, is that assessments increased substantially on less than 2 percent of taxed parcels in the county.
The Bulloch County Board of Tax Assessors staff looked mainly at income-producing properties, issuing higher assessments on 500 to 600 parcels out of the more than 30,000 parcels in the county, Chief Tax Appraiser John Scott confirmed.
For income-producing property, such as rental buildings, the capitalization rate, a ratio between the net income from the property and its purchase price, factors into tax assessments. When a property that has not been making much income returns to profitability, the capitalization, or cap, ratio goes down, and the assessment goes up.
"Basically it's just a reflection of what we interpret as an improving economy," Scott said. "Back when the economy kind of tanked on us, we had a lot of dark storefronts, shopping centers, apartment vacancies and those kind of things, and we're seeing some of those wake up, and occupancy has picked up ... and cap rates are historically low."
But while the higher assessments apply to this kind of property, a Taxpayer Bill of Rights rollback applies to all properties.
So, the school board's pending rollback — and a rollback from the commissioners, if they decided to grant one — would offer limited relief to all property owners but would not be enough to reverse the increases felt by the owners of income-producing property whose assessments went up.
Assessment notices went out May 27, and property owners had 45 days to appeal, Scott noted.
If the market for residential and other types of property continues to recover, owners can expect assessments to begin to rise in 2015 and beyond, he added.
"When those values were going down and the digest was declining, the commissioners and the school board could have actually raised their millage rate, had they chosen to do so, to offset the decline in the value," Scott said. "They did not raise any millage rates during that period of time. That's the irony of this whole situation."
Since 2009, the county government has lost almost $1 million in property tax revenue from declining property values and more than $2 million in other revenues, Couch observed in a written statement. But through this period, he said, the county used aggressive cost-cutting measures and drew from its reserves to avoid raising the millage.
"However, the county cannot further resort to using additional reserves to fund operations at the risks of lowering the county's credit ratings and affecting cash flows by creating the need to borrow in anticipation of property tax receipts," he said.
Couch said he is seeking to rebuild the county's cash reserve and asking commissioners "to weigh prudence in the form of financial responsibility, versus popularity in the form of tax relief."
Meanwhile, on a recommendation from Bulloch County Schools Superintendent Charles Wilson, the school board recently voted 7-1 to roll back its rate from 9.95 mills to 9.848 mills, avoiding tax increase hearings. A final vote of the school board on its millage is slated for Aug. 14.
If the commissioners follow Couch's recommendation, the county government and school system will have gone opposite directions on the rollback decision. One board's rollback and the other's lack of a rollback will then largely cancel each other out.
Al Hackle may be reached at (912) 489-9454.