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8-22-08 Change needed in Property Tax Assessments – Too many ‘Little Farms’ less than 20 acres

Georgia Department of Revenue … That report showed a top 10 list of counties where hundreds of millions of dollars in total value of land were eliminated and millions of dollars in tax burdens shifted to taxpayers. Morgan County is at the head of the list……….. Walton, ……… sixth on the list that included Cherokee, Oconee, Forsyth, Hall, Gwinnett, Jasper, Paulding and Newton counties.

AVOC

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August 21, 2008

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Change needed in Property Tax Assessments – Too many ‘Little Farms’ under 20 acres

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By Wendell Dawson, Editor, AVOC, Inc

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More and more counties are looking at the loss of revenue and tax burden shifting as a result of liberal use of the Conservation Use Tax Assessment.   The intent of the CU tax break was to help preserve farms and large land tracts.   It was intended to lower the burden on farmers and owners of family homesteads with agricultural purposes.   It would promote ‘smart growth’ and lessen the incentive of land owners to subdivide.

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However, the doctrine of “unintended consequences” came into play.   Too many “gentlemen farmers” were allowed in the program resulting in a huge shift in the property tax burden onto homeowners with traditional residential lots.   More and more county governments are taking a look at the policy and considering increasing the acreage minimum to more than ten acres.Oconee in the past has allowed five acre parcels and has one of the highest numbers of “small farms” in Georgia.

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Four County Comparison of number of Conservation Use Parcels less than 10 acres with Homestead Exemption

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County

C U Count

Less than 10 acres with Homestead

% Qualifying for CU

Clarke

6  

16,209

0.037%

Barrow 

121

14,545  

0.83%

Jackson  

117

12,322   

0.95%

Oconee 

162  

7,423 

2.2%

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2.2% may not seem like a large number at first, but when you compare it to surrounding counties you can see that the percentage is double or more.

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In Oconee and other counties, the CU program is used by developers and land investors to buy an inventory of land and benefit from a huge tax savings while holding the inventory.   This is not the intended purpose of the CU program.   

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It is time the State changed property Tax policies.   Local Property Taxpayers continually see their tax bills go up every year.   However, the elected officials say “we don’t control assessments….. it is not our fault!”.    The tax assessors say, “we don’t set the millage….. it is not our fault”!   Elected officials talk about lowering millage (usually a fraction of a mil and always less than the increased tax digest from increased assessments).   All incumbents in the recent General Primary ‘bragged’ on reducing tax rates but it appears most citizens were not fooled!   Citizens have the reality of annual tax bills that continue to climb.

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Sales taxes, (LOST, SPLOST and ELOST) have only exacerbated the property tax problem.   Too often, the funds are used to build “Taj Mahal” projects that require significant increases in operating and personnel costs.     Bigger and bigger jails and bigger and bigger parks carry annual operating costs that will cost taxpayers much more than the original capital cost.

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While I don’t like having to pay more because of loss of the State’s increased Homestead Exemption grants to local governments, Sonny Perdue is right when he says it has not lowered property taxes because of the overwhelming growth of local governments.    A cursory look at the differences in payroll and budget sizes in recent years shows the multi-fold growth- far outstripping the population growth.

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Speaker Richardson went about it wrong but at least he was trying to deal with the “Property Tax Problem” by replacing it with sales tax.   Much of the hullabaloo came from county commissioners, school boards and mayors and council persons who did not want to lost the “property tax ‘sugar daddy’” with its hidden tax increases.

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News coming out of many counties now, (Walton, Jasper, Pike, Clarke, etc) indicates that most taxpayers are getting fed up.   Several counties have looked at increasing the minimum acreage to 20 acres with exceptions for real agriculture, like Catfish farms.   Unfortunately, some of Oconee’s officials are benefiting from the lower minimum.    Chairman Melvin Davis has his 11 acre ‘Plantation’ in the program.    To me, the political hypocrisy outweighs the few hundred dollars of tax savings for him.

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Citizens need more out of our State Representative than trite sayings like, “we have to think out of the box….we have to set priorities…..”   Pressure will continue to increase on elected officials on tax issues.   Citizens are more informed than ever.   Citizens have more means of communication.   That force needs to be directed toward REAL PROPERTY TAX RELIEF.  

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LINKS OF INTEREST:

5-22-08 Oconee Tax Assessments- Not all taxpayers pay the same rate- Some Connected

6-1-09 Interesting tidbits about Oconee County tax assessments


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8-14-08 Walton County looking at Conservation Use Assessment and loss of revenue

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That report showed a top 10 list of counties where hundreds of millions of dollars in total value of land were eliminated and millions of dollars in tax burdens shifted to taxpayers.Morgan County is at the head of the list……….. Walton, ……… sixth on the list that included Cherokee, Oconee, Forsyth, Hall, Gwinnett, Jasper, Paulding and Newton counties.

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The Walton Tribune

http://www.waltontribune.com/story.lasso?ewcd=b56e1dc133bb2f6a

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August 13, 2008

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Conservation plan costing Walton Co. taxpayer

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By Robbie Schwartz

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WALTON COUNTY — County officials are looking at possibly narrowing a special assessment program that has put Walton County on a top 10 list they may not want to be on.
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In 2006, Walton County had 902 parcels of land in conservation use, which represented $ 142 million in lost value of taxable land because of the tax break associated with the Conservation Use Assessment. In 2008, there were 990 parcels that represented a $ 166 million in lost value of taxable land. As a result, a more than $ 4 million tax burden was shifted onto taxpayers both years.
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This is representative of a growing trend in north Georgia counties, often the nouveau urban counties where smaller tracts of land are placed into conservation use programs perhaps not in line with the spirit of the program.   But in Walton County, the trend may come to a screeching halt.
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Ricky Dillard, chief appraiser and assessor for Walton County, informed commissioners at last week’s meeting about the passage of Georgia House Bill 1081. The bill, passed back in March, amended the state’s code relating to ad valorem taxation of property and changed provisions regarding qualification for bona fide conservation use property. The law now allows for the county to determine the minimum amount of acreage set as a condition for qualifying for conservation use.
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Prior to this legislation, there was no minimum but only different stipulations required for tracts under 10 acres.……………………
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The inequity of the program as it stands now is most apparent in Walton and surrounding counties, as well as other parts of the state where strong residential and commercial development is occurring, according to a report by the Georgia Department of Revenue.
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That report showed a top 10 list of counties where hundreds of millions of dollars in total value of land were eliminated and millions of dollars in tax burdens shifted to taxpayers.Morgan County is at the head of the list, with 13 percent of its land in conservation use and $ 214 million in total value of land eliminated as a result of land placed in conservation. In 2006 this represented a $ 5.7 million tax shift. Walton, with 5 percent of its land in conservation use that same year, was sixth on the list that included Cherokee, Oconee, Forsyth, Hall, Gwinnett, Jasper, Paulding and Newton counties.
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According to the report, these 10 counties account for approximately 25 percent of the total tax shift as a result of the Conservation Use Assessment in the state in 2006, the year the study was based on. The department has not released its 2007 report yet.
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Dillard proposed the county consider establishing the minimum limit for parcels wanting to enter into the conservation use program at 20 acres.
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Such a limit would affect as many as 1,330 parcels of land between 10 and 25 acres not currently enrolled in the conservation use program.
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“This won’t stop the large tracts from entering into conservation use, which is the true intent of the program,” Dillard said. “The county must weigh the benefits of small tracts being in this program against the cost of the services they use.”
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Commissioners voted to allow legal counsel to review the proposal and to consider the tightening of regulations for conservation use at its Sept. 2 meeting.
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Any changes made would affect only property filing for conservation use after passage of a local ordinance and those lands that would re-file after Jan. 1, 2012, 25 years after implementation of the initial conservation use code.


8-20-08 Perdue is right about the overwhelming growth of local governments

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The Athens Banner-Herald

http://www.onlineathens.com/stories/082008/news_2008082000187.shtml

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August 20, 2008

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Perdue freezes property tax grants, calls them 'ineffective'

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To save state $ 428 million

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By Shannon McCaffrey

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ATLANTA - Gov. Sonny Perdue said Tuesday homeowner tax grants help fatten local government coffers but remain "ineffective" in driving Georgia's property taxes down.

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Perdue has frozen the $ 428 million in grants that had been set to go out this year as the state scrambles to close a budget shortfall. He said Tuesday he'd like to see the grants - which local officials say average about $ 200 to $ 300 per household - scrapped altogether.

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"I think there are better ways to help our local citizens reduce the growth of property taxes," Perdue said…………..

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Perdue likely is to face stiff opposition from state lawmakers who fear elimination of the grants could push property taxes higher in a year when they had pledged to lower them.

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"We want to keep them," said House Rules Committee Chairman Earl Ehrhart, R-Powder Springs. "We agree that there is a problem with the growth of local government, but (the grants) are tax relief for homeowners."

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Lt. Gov. Casey Cagle, who presides over the state Senate, echoed that sentiment.

"We need to keep his grant intact so that Georgia's homeowners are not affected any further in this current economy," Cagle said.

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Perdue acknowledged the issue is "politically nuclear" for legislators who, unlike him, face re-election this fall.

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But he said the growth of local governments has been "overwhelming," far surpassing the rise in state government. His office released several pages of documents charting the increase.

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He said local property taxes have continued to rise and the state grants are simply being used to expand local government.

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Local officials acknowledged their costs are growing, but said that's because their populations are. With that has come an increase in demand for services like trash collection, schools and police…….


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