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First year analysis of senior homestead tax exemption

POSTED: April 21, 2010 4:00 a.m.

Last year was our first year of experience under the 65-plus Senior Homestead Tax Exemption program voted in by Lumpkin County voters by over 80 percent.

  

The following analysis only concerns the Lumpkin County 65-plus Senior Homestead Exemption program and does not include other local or state homestead exemptions. It is based on information gathered by my staff recently from lengthy discussions with Lumpkin County Tax Commissioner Rachel Pruitt and Chief Appraiser Don Head.

  

It should provide hard evidence and be valuable information for our taxing bodies and taxpayers alike. It was a learning experience for Rachel, Don and me. There will be a lot of numbers in this data so I’ll try to make it easy to understand. That’s the way I did it when I taught statistics at North Georgia College & State University.

  

I hope to do a similar analysis for Dawson County when the first year’s data becomes available for their proposed Senior Homestead Exemption. 

  

There are 16,455 taxable land parcels in Lumpkin County. Twelve percent (1,978) of the parcels are located in the city of Dahlonega. A total of 1,301 parcels (7.9 percent) countywide qualified for the 65-plus Senior Homestead Tax Exemption. Two hundred thirteen (16.3 percent) of these 1,301 qualifying parcels were located in the city. The remainder of 15,154 countywide parcels did not apply and qualify for the program.

  

All homestead exemptions create a tax shift from those who apply and qualify for the various exemptions to those who do not. No matter what you may have heard from the taxing bodies, a tax shift does not cause any taxing body to lose tax revenue. Taxing bodies (cities, counties and school systems) set a millage rate to cover their budget.

  

Homestead exemptions make changes in where those tax dollars come from.

  

Tax on parcels without the exemption goes up to make up for the lower tax on parcels with the exemption. The budgeted tax dollars come in regardless of homestead exemptions.   

  

In 2009, the 65-plus Senior Homestead Exemption program in Lumpkin County caused a total tax shift (city, county, schools) of $1,334,945 from 1,301 qualifying parcels to 15,145 non-qualifying parcels. That’s an average shift of $88.09 onto each non-qualifying parcel.

  

Of that number, there was a tax shift of $61,098 in city ad valorem property taxes accounting for $4.04 average shift onto each non-qualifying parcel. There was a tax shift of $578,642 in county ad valorem property taxes accounting for $38.18 average shift onto each non-qualifying parcel. There was a tax shift of $695,203 in school system ad valorem property taxes accounting for $45.87 average shift onto each non-qualifying parcel.

  

Please remember that the 1,301 parcels qualifying for the 65-plus Senior Homestead Exemption program pay full taxes on any assessed value over $60,000 for city and county ad valorem property taxes and over $120,000 assessed value for school ad valorem property taxes. Additionally, full taxes are paid on all acreage over the five contiguous acres allowed for homestead.

  

These tax shift numbers come from applying the different millage rates for the city, county and school system to the assessed value and calculating ad valorem property taxes with the 65-plus Senior Homestead Exemption in effect for each.

  

For comparison, we then made the calculations as if the 65-plus Senior Homestead Exemption was not in effect. 

  

All the various homestead exemption programs combined cause a much smaller shift in total tax dollars than does the Conservation Use Covenant program.

  

Did you know that a total of 49,605 acres out of 116,734 taxable acres in Lumpkin County (42 percent) have qualified for Conservation Use Covenant tax exemptions?

  

Conservation Use Covenant land pays about 10 percent of the ad valorem property taxes owed on the land. The remaining 90 percent gets shifted to the rest of us who don’t qualify for the program. 

  

An important thing to remember about Conservation Use Covenant land is that ‘chickens don’t go to school and cows don’t drive cars on our roads.’ These properties use less government services. 

  

Finally, some folks have told me that their property taxes went up more than $200 in 2009, not the average $88.09 per parcel as discussed earlier. About $205 of that increase would have been attributable to the scaling back of the governor’s Homeowners Tax Relief Grant.

  

When originally established, HTRG was a credit paid by the state over and above the basic $2,000 regular homestead exemption. During good economic times, HTRG had been increased from the $2,000 base level to $10,000. 

 

Because of the economy, the Governor had to scale that back to the original $2,000.

  

When the economy improves, I hope that HTRG can be reinstated.

  

This information has been presented to make it easier to understand the impact of the Lumpkin County 65-plus Senior Homestead Exemption program. It is not designed to point any fingers of blame on any taxing body, taxpayer group or elected officials for our current revenue dilemma.

  

As James Carvill said several years ago: “It’s the economy stupid.”      

   

Rep. Amos Amerson can be reached at 401 Capitol Avenue, Atlanta, GA 30334; (404) 657-8534; e-mail amos.amerson@house.ga.gov. Or contact Gerald Lewy at (706) 344-7788.

 

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