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Ballot measure would lower property taxes in DeKalb County, benefit cities

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Ballot measure would lower property taxes in DeKalb County, benefit cities

DeKalb County Georgia. Source: Google Maps.
DeKalb County Georgia. Source: Google Maps.

DeKalb County Georgia. Source: Google Maps.

This November, DeKalb County residents will be asked to consider two ballot questions.

One asks if voters will adopt a one-cent sales tax to invest in infrastructure projects, known as a Special Purpose Local Option Sales Tax, or SPLOST. That tax is expected to generate $540 million in revenue over five years for projects such as roads, sidewalks, police stations, fire stations, parks and libraries.

The county is currently conducting a survey about how to spend the SPLOST proceeds. All of the money would have to be spent on a project list approved by the voters. To take the survey, click here.

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The other question asks if they would consider dedicating 100 percent of the Equalized Homestead Option Sales Tax proceeds to property tax relief, or EHOST. Both bill have to pass for either to take effect.

There is broad agreement that property owners in the city will get a tax cut as a result of EHOST, but there’s some disagreement about the effect it will have on unincorporated taxpayers. Former Decatur mayor Bill Floyd, currently Managing Director of the DeKalb Municipal Association, and Commissioner Jeff Rader said unincorporated taxpayers could see an increase on their tax bills. Rader called it a “small increase.” But officials with the county say it will be essentially a wash for unincorporated residents.

If the measure passes, property taxes would be lowered and residents living in cities would likely see the greatest benefit, Decatur City Manager Peggy Merriss said.

The November 8 referendum is intended to correct an imbalance in the distribution of the HOST tax, which has funded infrastructure improvements.

Whenever a new city forms in DeKalb County, it eats into those funds. The current penny HOST tax is divided into two categories. Under the current funding formula, 80 percent goes to tax breaks for property owners and 20 percent pays for infrastructure projects. But as new cities have formed, they have taken more and more of the 20 percent set aside for these projects and the county has received less. For a more detailed explanation of how HOST is currently distributed, click here.

Merriss said that if voters approve the two ballot measures, cities would see their property taxes lowered more than residents living in unincorporated DeKalb County.

“According to my estimate, under the current one penny HOST sales tax arrangement, a $500,000 homestead property in DeKalb County would have a total property tax bill of $7,078 and a property with the same value in the city of Decatur would have a total property tax bill of $8,798, which includes $1,270 of DeKalb County taxes,” Merriss said. “Under the two penny EHOST/SPLOST scenario, the same $500,000 homestead property in DeKalb County would have a total property tax bill of $6,621 and a property with the same value in the city of Decatur would have a total property tax bill of  $7,650, which includes $122 of DeKalb County taxes. The unincorporated DeKalb County taxes are reduced by about $457; the DeKalb County taxes for the City of Decatur property are reduced by about $1,148.”

Merriss added that her estimates assume the one-penny EHOST tax will generate enough revenue to cover 100 percent of homestead exemptions for county operations and the Hospital Authority.

DeKalb County Budget Director Jay Vinicki said the current HOST tax relief is applied to five categories of taxes: police taxes, fire taxes, parks and road taxes, hospital taxes and the general fund. Cities typically do not pay for police, fire and parks because they provide these services. EHOST would restrict tax relief to the hospital and the general fund, so while taxes in those other categories would go up, hospital and general fund taxes would go down, Vinicki said.

“Those are the only two taxes which affects all county residents,” Vinicki said. He said EHOST is “basically break-even for unincorporated residents.” He said the county’s estimates of the tax impact assume a millage of 10.67, the average rate over the past four years.

In a letter published in Decaturish, Commissioner Rader said under EHOST, “Unincorporated home owners will only see an average $9 decrease, and some may see a small increase in net property taxes.”

Floyd spoke about the SPLOST and EHOST ballot proposals during a recent joint work session between School Board members and City Commissioners.

“If you’re in the city, your county taxes go down,” Floyd said. “If you’re in the county, your county taxes will go up.”

Floyd said the approval of EHOST might be a factor in future annexation discussions. Commissioner Tony Powers said EHOST would make tax bills between the city of Decatur and unincorporated DeKalb County more comparable.

“Suddenly the city taxes and county taxes are pretty close to even,” Powers said. “You don’t have the big jump from Decatur taxes to county taxes. That makes our annexation look a lot better.”

Decaturish followed up with Floyd and asked him to elaborate further on his claim that county taxes would go up in light of Merriss’ analysis. Floyd said, “She’s probably right” and said his claim was based on county taxpayers having to pay the full rate for police, fire and parks if EHOST is approved.

“There’s no easy way to explain it,” Floyd said. “If you’re in unincorporated areas, your tax bill goes down but just not as much as it does in the city areas.”

So if the EHOST distribution grants a larger tax break to city taxpayers while unincorporated taxpayers are at best unaffected, why should unincorporated taxpayers support EHOST?

DeKalb County CEO Lee May said that’s up to individual voters to decide.

“I live in unincorporated DeKalb as well, it’s basically a break even proposition for me,” May said. “However as an unincorporated resident I get the benefit in that (if SPLOST passes) the county gets more funding to invest in infrastructure and capital needs the county has.”