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Elected officials confused about tax cuts

POSTED: August 17, 2008 5:03 a.m.

I don’t understand why some elected officials and candidates for local office are still confused about tax cut referendums on the November ballot. Most taxpayers seem to get it.  They understand the need for some property tax relief for their parents and grandparents and the permanently disabled who are on fixed incomes and being taxed off their land. 

 

While only 12 percent of us are senior citizens, ad valorem property tax cut referendums usually pass by more than 80 percent. 

 

At a local political run-off forum last week, some candidates expressed belief that the amount of the ad valorem property tax cuts in the proposed November referendums would be lost to local government and have to be made up in some other way.

 

Let me explain why that is incorrect.

 

Tax cuts for senior citizens and the permanently disabled are increases in Homestead Exemptions and treated like all other Homestead Exemptions. They are a tax shift from those who qualify for the exemption to those who do not. 

 

The same amount of revenue comes into the taxing jurisdiction. A small part of the tax burden is shifted from a few and spread out among many. The amount of tax shift per homeowner under age 65 in this November’s referendums for cities and counties is about the cost of a haircut. For schools it’s less than the cost of a dinner for two.

 

When I started this study, I contacted about 60 homeowners under age 65 and asked them if they would be willing for their taxes to increase from $2 to $3 per month so that those 65 and over could save about $1,000 per year.

 

After a little discussion, the homeowners usually said that they had no objection to the tax shift. A few said they would need to think about it.

 

I have faith in our voters. When given the opportunity to vote on how they want to be taxed, our voters usually make good decisions.

 

My job is to provide you the opportunity to vote in November.

 

Your job is to decide how to vote in November.

 

It is important to remember that taxing jurisdictions (schools, counties and cities) set their own budgets and millage rates to generate the revenue to meet those budgets. If they decide, for example, that a budget of $17 million is required to provide agreed upon services, they set a millage rate to bring in $17 million.

 

Who pays what portion of the pie is determined by property values and qualifying Homestead Exemptions. 

 

The challenge for taxing jurisdictions during these difficult times is to provide necessary services without raising your taxes. Raising taxes is not popular in an election year, or any other year. Every city, county and school system in the state is having the same discussion we are. We are all asking the same question:

 

How can we provide the same or more services with less revenue?

 

The same is true for the State of Georgia.  In a recent Atlanta news report: some “Think Tanks” are calling for a special session of the General Assembly to rework the FY 2009 Budget. 

 

FY 2008 ended with a $600 million shortfall, which the Governor took from reserves. 

 

Should the tax receipts for July and August continue the downward spiraling; the General Assembly may have to convene for some “axe wielding.” 

 

The Budget does include $700 million in new spending and about $150 million in tax cuts.

 

Both new spending and tax cuts are being closely scrutinized by the governor, and the leaders in the House and Senate, in hopes of avoiding a special session.

 

Let me know what you think about our tax cut referendums.  I can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533, (706) 864-6589, e-mail hamerson@alltel.net.

 

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