Freezing Fulton property taxes would leave Atlanta Public Schools out in the cold

Freezing property assessments in Fulton County would cast a pall over Atlanta schools, says the school chief. STEVE SCHAEFER / SPECIAL TO THE AJC

In an emergency meeting today at 12:30 p.m., the Fulton County Board of Assessors will face property owners angry over steep climbs in the assessed values of their homes.

Those assessments determine property taxes, and Fulton and Atlanta homeowners naturally don’t want to see higher tax bills. Atlanta Public Schools Superintendent Meria Carstarphen, whose own Atlanta tax bill shot up 53 percent, understands taxpayer concerns. However, she also has a school system to operate, one that has been hard hit by soaring pension costs and rising healthcare. (Those expenses are skyrocketing as the state increasingly shifts costs to districts. Carstarphen inherited a massive pension liability due to years of underfunding. As Robert Stockwell notes on his APS-related blog: “Since at least 2002, APS has made payments ranging from $39-46 million on an annual basis and the annual required payments will escalate significantly over the next several years.”)

Freezing assessments would hurt Atlanta schools and kids, said Carstarphen. She fears Fulton will fall back on the politically safe response to property owner outrage — throw out the new assessments and use the 2016 valuations. That could mean no rise in funds for schools despite growth in the tax digest.

“If they delay the digest or freeze assessments, it is just passing the problem on to another year,” said Carstarphen in an interview late Wednesday afternoon. “The only solution put on the table so far is to freeze assessments at the 2016 levels. We know it is a city that has had growth; everybody knows this.”

Atlanta’s budget was months in the making and involved public hearings and long discussions, she said. “People want to see transparency. We try not to surprise people…And here we are with a possible surprise. No new revenue. We are really working to get a quality workforce for one of America’s great capital cities,” said Carstarphen.

Fulton projected a 5 to 7 percent growth in tax revenues so Carstarphen built her Fiscal Year 2018 school budget, signed contracts and hired staff predicated on a 6 percent increase, figuring it was a safe middle ground.

Carstarphen wants Fulton to consider other options, such as capping assessment increases or phasing increases in over time. “We are willing to do our part and we are willing take actions to get us to a more balanced solution, but we can’t keep kicking this can down the road,” she said.

The Fulton appraiser stands behind the assessments. As the AJC reported:

For nearly a quarter of Fulton County homeowners, assessments are up 50 percent or more. Half of the county’s nearly 320,000 parcels received assessments that are at least 20 percent higher. The jumps came because Fulton didn’t maintain regular increases in past years and had valued properties too far below market value, Fulton County Chief Appraiser Dwight Robinson has said.

Robinson has acknowledged the sharp jump in value for many homeowners. But he said that after years of ignoring a rising market, the county is likely to be fined by the state if he doesn’t capture the increase in this year’s assessments.

The state requires governments to value residential properties between 90 and 110 percent of fair market value. Robinson said the Georgia Department of Audits and Accounts notified his office last year that Fulton‘s assessments would be out of compliance. Its letter indicated Fulton County was below 80 percent of fair market value. “Statistically, we’re OK, ” Robinson said last week of the new assessments. “The values are good.”

In a statement, APS said tonight:

As a school district in a growing city, Atlanta Public Schools (APS) has been working to keep up with mandatory pressures – the state’s increase to teachers’ base salaries, pension and retirement obligations and rising health care costs among them.  The projected 6% growth in local revenue pays for those mandatory obligations.

Understandably, the reassessments left many residents in a difficult position as the digest may show double-digit growth with individual property reassessments ranging widely from 1 percent increase to over 100 percent.   At 12:30 p.m., Thursday, June 15, the County Board of Assessors plans to consider solutions for the reassessments including freezing property values to 2016 tax values.

While we understand the impact that reassessments could have on our communities, we must also consider the damage deep cuts will have on our schools and the education of our students especially at this late stage in the budget and hiring process.

Our first priority is our kids. Our mission is to prepare each one for college and career, and help make them good citizens along the way.  Every decision we make is based upon that ideal, and we make those decisions in a fiscally responsive and prudent fashion.

As we explained in a letter to Fulton County Attorney Patrise Perkins-Hooker, we believe the county needs to find a more balanced, more measured and more reasonable approach that provides at least the 6% increase in the digest as projected. To help reach that solution, APS will consider a millage rollback to ease taxpayer pressures.

 

 

 

Reader Comments 0

48 comments
Stephen0785
Stephen0785

We gotta to pay for things like those 60 Glock .40 APS lost. I wonder if they ever found them. There is absolutely no way my kids would ever attend these school.

class80olddog
class80olddog

So how much does APS want per child for education? $20,000 per student per year?  I would bet if they spent that much, they would STILL be a failing system.  YES, AvgGeorgian, SCHOOLS FAIL!  They fail when the majority of their student graduate, but could not come close to passing the old GHSGT.  

class80olddog
class80olddog

Same as always - mo' money, mo' money, mo' money.

class80olddog
class80olddog

I noticed buried in the comments was the observation that the APS retirement was grossly underfunded in the past.  Where have I heard that before?  

class80olddog
class80olddog

When I lived in North Georgia when the recession hit, values of property plummeted, but the local assessor refused to lower property values, saying the schools would take a hit on taxes and they would just have to up the millage rate.  So it sounds like they want to eat their cake and have it, too!  Keep assessments high when property values go down, but up them immediately when values go up.  

Lee_CPA2
Lee_CPA2

On a side note, the assessors in my county seem to do a good job.  Appears as though they follow an "unofficial" policy to set valuations slightly below market.  Wasn't always the case and I remember when I used to appeal on a regular basis.

The appeals process is a joke and of course, you have the option to get a lawyer and take it to court, but you would have to be talking about hundreds of thousands (millions?) of dollars of contested valuation for that to be feasible.

Starik
Starik

@Lee_CPA2 If all the unhappy fp;kd s[[rs; iy will overwhelm the legal process. The county would have to settle.

OriginalProf
OriginalProf

I'm a longtime Fulton County homeowner, and truthfully I've seen this day coming for many years. Our assessed house value never seemed to go up very much, possibly because we had lived in the same house for 30+ years in an intown Atlanta neighborhood and for the last 10 or so had a seniors' homestead exemption. But for the last few years we have watched house prices around us soar as people moved back intown. Hard to believe that some houses around us now are going for half a million$!


And I do know that the APS schools have these legal expenses (teachers' salaries, pension obligations, and so on). People may not like it, but we have to pay them. 


Seems to me that freezing our property taxes is just doing more of what got us here in the first place. Not a good idea!

AvgGeorgian
AvgGeorgian

@OriginalProf

So for 10 years you have increased value in your home without paying increased taxes on that value? I know you are not against paying your share. Increasing value of property and income includes increased taxes.  For those of you in the catch up phase of property taxation, count yourself fortunate for the windfall of increased value without increased taxes for many years. It is a difficult situation now as some may have to sell or rent their homes. Hopefully the profit will help somewhat.

OriginalProf
OriginalProf

@AvgGeorgian @OriginalProf  Yes to first sentence, and we used to worry about what the ultimate result would be! We have found out, and will pay what we owe without appealing. And I agree with the APS Superintendent.

Lee_CPA2
Lee_CPA2

This article points out a couple of issues:

1.  No matter how much tax revenue is provided, politicians and bureaucrats will find a way to spend it.  The ink hadn't dried on the assessments and Carstarphen had already spent the increase.

2.  The power to tax is the power to destroy.  Property taxes are especially onerous as they seemingly punish good behavior (improve your property and pay higher taxes) and the assessments are not based on historical value but rather a subjective opinion of it's worth.


Issues with property tax valuations have been going on for decades.  Back in Gwinnett's  heyday in the 70's and 80's, families were forced to sell family farms that had been in the family for generations because of rising tax bills.  Condemned properties were getting an increase in value.  Properties that sold at auction (what better way to determine the true market value?) were appraised at double the auction value.

The list just goes on and on.


Personally, I think the legislature should do two things:

1.  Cap property assessment increases to a certain value - say not to exceed 10% per year.

2.  If you exhaust all methods to appeal your taxes and still think the county have overvalued the assessment, I think you should be able to force the county to buy the property at the value they appraised it.

AvgGeorgian
AvgGeorgian

@Lee_CPA2

Or they could increase the income tax on a progressive scale.


Schools also need to decrease admin. positions and limit admin retirement pay qualification to top teacher pay plus 10% of that pay.

AvgGeorgian
AvgGeorgian

@Lee_CPA2 If you own property and it increases in value and you can sell it for  profit, why shouldn't you pay higher property taxes?


How about you get to keep your low appraisal but have to sell it to the county at that price when you want/need to sell?

bu22
bu22

@Lee_CPA2 Other states do cap increases.  I know Texas caps it at 10% a year.  Your assessment will eventually go up, but no more than 10% per year.

Lee_CPA2
Lee_CPA2

@bu22 @Lee_CPA2

Seems like a reasonable solution.  At least you have a chance to plan for the increase systematically instead of getting hit with a huge increase in one year.

dsw2contributor
dsw2contributor

@bu22 @Lee_CPA2 At a 10% per /year increase, the property owner ends up paying double the property taxes after only seven years!

AvgGeorgian
AvgGeorgian

Is anyone here saying thy couldn't sell their house for the appraised value?

Queen of Ctown
Queen of Ctown

Most of us get that the new assessed values are more accurate.   But, to make it about ME, my property is a prime example as its value did not TRIPLE in ONE year.   My taxes will almost quadruple and, because they're escrowed, I'll have to come up with an additional $14,000 early next year.

I wasn't blind to the fact of that I'd have to move eventually but now it's basically become an emergency.   Even if I could pay the almost $1000 just for taxes an insurance there's no way that I'd continue to do so knowing that most of it will go to APS.

Even the Assessors have admitted that it was THEIR failure in not keeping up with the real values.   

The increases need to be graduated over a number of years or a lot of people will lose their homes.  Yes, we can sell, but not tomorrow. And I think, ironically, that the tax issue will actually drive values down.

MaureenDowney
MaureenDowney moderator

Here is a question: The state has told Fulton its appraisals are too low. Is the state wrong?

Several people I have talked to acknowledge their houses are worth much more than their assessments indicate, but they are unhappy about the likely big jump in their taxes, even though the new amounts may be more reflective of real value. 

Those of you objecting: Is the issue that the appraisals are out of whack and not reflective of house values or is it that homeowners aren't prepared to pay the increased taxes that will follow those higher appraisals?

(And I understand this issue -- I have had a similar experience in Decatur. But housing prices have risen so the value is not incorrect and the house sales around me substantiate the higher value.)

If Fulton is under state edict to get its appraisals in line with actual values, what is the solution? 

MaryElizabethSings
MaryElizabethSings

@MaureenDowney


The jarring, enormous increase is too much, too quickly for homeowners on fixed incomes, especially for seniors, to absorb without difficulty.

BurroughstonBroch
BurroughstonBroch

@MaureenDowney  How is it that the overall digest is up only 13% yet many properties are greatly increased? On which properties were appraisals greatly reduced? 

L_D
L_D

@MaureenDowney The step most people are forgetting is that the county commission, city councils, and school boards use the digest to set their millage rates.  To my knowledge, none of these entities have set their millage and most are stating that they would roll back the millage rate to match the 5-7% estimated increase on which they based their budgets.

Yes, there are properties with inaccurate assessments, but most people I have spoken with have an assessment in range of actual sale value. It isn't the time to freeze assessments, but to have conversations with those entities that set the millage rates to have them hold to the 6% increase, regardless of increases in property values.

MaryElizabethSings
MaryElizabethSings

Thanks, Original Prof. I have already had that senior exemption, however.

bu22
bu22

@MaryElizabethSings And some districts have freezes for older adults.  Once you hit 65, it stays the same.   I think Decatur was actually talking (Maureen should know) about exempting seniors from school taxes.

Astropig
Astropig

@BurroughstonBroch @MaryElizabethSings @MaureenDowney


"But it's for public school education! And you've told us many times we must give all to support public school education. You must take your medicine like the rest of us."


Agree 100%. Tax increases are not abstractions when they land in your own mailbox.

An American Patriot
An American Patriot

I would be very wary of giving either Fulton County or The City of Atlanta any additional funds unless a mechanisn is put in place to track any additional monies given to the school systems.  There's a big, black hole that money finds itself in when there's not a watchful eye watching everything.  Don't do it.

L_D
L_D

@An American Patriot There is a mechanism, it is called the "budget."  Not only is it a public document, but there are also public hearings on it.  Also, there is an annual audit, which is also available.  Want to know where money is going? Go to board meetings, read the minutes, talk to your board member.

MaureenDowney
MaureenDowney moderator

@L_D @An American Patriot Atlanta is facing two considerable weights: Pensions and healthcare. 

Here is a great explanation from Robert Stockwell on why APS has such a large pension burden:


As background, the unfunded pension liability in the City General Employees’ Pension Plan goes back decades due to the underfunding by prior Boards. However, the significant underfunding became more prominent when back in the 1970’s when the teachers in City Plan moved to the Teacher Retirement System (TRS). TRS required that the transfer of the teachers to their system be “fully funded”. As a result, a substantial amount of the pension assets were transferred to TRS and, at that point, APS’s share of the City Pension Plan was woefully underfunded. Since at least 2002, APS has made payments ranging from $39-46 million on an annual basis and the annual required payments will escalate significantly over the next several years.

The pension liability payments are currently coming out of the General Fund and the annual payment represent 7-8% of total General Fund spending. The current annual payments are approximately $1,000 per student and the payment amounts could go as high as approximately $1,600 per student in future years. As such, these amounts cannot be spent for educational purposes.

In the past couple of years, the payments have resulted in some controversy as to who is responsible for sharing in the payments. The administration has contended that the charter schools must bear their share of this expenditure that arose many years before the charter schools came into existence. The charter schools argued that the methodology being used by the administration to calculate the charter schools share of “local revenues” was not in accordance with State law and that they should not bear any of the cost of the underfunded pension. The GA Supreme Court has agreed with the charter schools.

This is a tough issue and impacts the core mission of APS as it reduces the amount of funds available to educate students. And unfortunately, due to the irresponsibility of prior Boards (going all the way back for decades) the problem has never been resolved. Further, the problem APS is facing now is the same pension liability underfunding that many local and state governments are facing across the country – and that has resulted in several local governmental units going into bankruptcy.

https://financial-deconstruction.com/category/aps-unfunded-pension-liability/

An American Patriot
An American Patriot

@MaureenDowney @L_D @An American Patriot Oh, so now we know why there is such opposition to Charter Schools. It's a money thing having to do with "Teachers Pensions".  So, what I'm reading into this is "we don't care about better educational opportunities for the students, we only care about our Pensions.....now we know where they stand.  OK, I'll say it again, brick and mortar schools, if we keep on this track will become obsolete because of the "teacher problem" and will lead to online education of our children because of the cost and the utter disregard by the teachers for childrens educations.

alt.AJC
alt.AJC

As charter schools compete to serve a growing share of the student population personnel costs should fall. Charter schools, in other words, benefit not only children and their parents but also the taxpayers. 

alt.AJC
alt.AJC

Giving parents tuition vouchers and tax credits likewise drive down costs.

Queen of Ctown
Queen of Ctown

@alt.AJC  Taking money out of one pocket and putting it into another pocket doesn't change the total amount of money.  

ATLGal1
ATLGal1

Oh come on! Schools get the VAST majority of the taxes AND has millions of splost funds. APS has a giant reserve fund. I'm not buying it.

MaureenDowney
MaureenDowney moderator

@ATLGal1 But SPLOST is limited; Here is what the law says:


Specific capital improvement projects for educational purposes, and/or

Retire General Obligation Bond debt previously incurred with respect only to capital outlay projects and/or

Issue new General Obligation Bond for specific capital outlay projects to be paid with SPLOST.

Shar1
Shar1

Our home's assessment increased 46% last year; this year's assessment increased that by another 15%.  There is no possible way that our house increased its fair market value accordingly.


Our corrupt, damn fool of a mayor gave away 30 years' worth of hotel/motel tax revenue to a billionaire, plus taxpayer cash, to build the new stadium.  The City Council approved it, knowing that the citizens of the city were solidly against it.  The bill is coming due, and they are looking to use the power of the state to cover up their personal greed in getting their sticky hands into Arthur Blank's pocket.


No.  Atlanta property owners already pay the highest millage rates in the state, over what the state constitution allows due to a special exemption.  We've had enough.


No sob stories about how the 'children will suffer' or cutting back on crucial items like police and fire, so that taxpayers will feel the hit right away.  Go cut out the bureaucrats, the Council's slush funds, the mayor's speeding "security team".  Cut the patronage and the tax giveaways.  There is plenty of room to economize in Atlanta's budget, but the  priority is not "the children", it is power.  We're sick and tired of paying for Arthur Ferdinand's appalling compensation and Kasim Reed's stupid, stupid streetcar.  


Go find some other suckers.



Q1225
Q1225

How about cutting costs instead?  Both Carstarphen and Arthur Ferdinand make almost $400K a year.  By comparison, the Chief Justice of the Supreme Court makes about $250K.  What's wrong with this picture?

POV1948
POV1948

@Q1225 This is a legit question. Cutting costs does not equal bailing on kids. 

proudparent01
proudparent01

Atlanta Public Schools is drowning in cash. Don't let them fool you into thinking that their problems are financial. 

Leuc Borris
Leuc Borris

 Meria Carstarphen your arguments are intentionally misleading on almost every single point.  Keeping the tax rate the same knowing that it will result in additional revenue over the previous year is a tax increase and requires public hearings. You should learn how to budget properly and not assume an increase on an item you knew very well would come into question and then cry about later.  To think that even a modest decrease in the rate would significantly offset the property taxes of those individuals seeing a 50%-100% increase is naive. How would you feel about a family with children in your schools that is forced out of their home due to tax increases.  Is this part of your grand plan for our kids?

Queen of Ctown
Queen of Ctown

@Leuc Borris  I especially like the part where she says "As a school district in a growing city....".   APS' enrollment has plummeted in recent years as the tax digest has exploded.   And in these times, a lot of people can only dream about having a pension or fully funded healthcare.  

bu22
bu22

@Leuc Borris Agreed.  If she thinks she needs more revenue, raise the millage rate.  Have the courage to argue for it and raise taxes in a public way instead of a hidden tax increase.  If they have hit the cap on the millage rate, their taxes are already too high.

Starik
Starik

Adjusting the millage rate might fix the problem. Maybe we could replace the people who create property value assessments with people who are more competent.