Fulton tax rates set; dip in collections likely

Commissioners lower rate after freezing property values.

After Fulton commissioners decided earlier this year to freeze property values, they voted Wednesday to lower the tax rate.

After Fulton County commissioners decided earlier this year to largely freeze property values at 2016 levels following residents’ complaints about huge increases, they voted Wednesday to lower the tax rate, as well.

The new tax rate, 10.38 mills for the county’s general fund, is down 0.7 percent from last year.

State law requires that counties reduce their tax rates to account for rising property values, or advertise a tax increase. Some Fulton County commissioners have said in the past they would like to keep reducing the tax rate, which was raised in 2014. The new rate is considered revenue neutral, though Fulton’s tax base has increased, the result of new construction.

Residents with a $250,000 house and a standard homestead exemption would save about $5 on their tax bill for the year.

In addition to the general fund rate, residents will pay .25 mills for library bonds. Residents in the new city of South Fulton will pay the county an additional 4.43 mills to compensate Fulton County for providing services for the four months before the city incorporated.

And property owners in the last unincorporated part of the county, the Fulton County Industrial District, will pay a tax rate of 12.16 mills to cover the cost of police, fire and other municipal services for the entire year.

They will also pay the South Fulton portion, 4.43 mills, because they were part of that area before the city was formed.

Fulton County Commissioner Lee Morris said costs to provide municipal services to the Fulton Industrial area had risen with South Fulton’s formation.

“I understand it’s a smaller area,” Morris said. “They don’t have the economies of scale with a smaller area.”

Commissioners agreed to the tax rates unanimously, with Commissioner Liz Hausmann voting via phone. The seven-member board is down to five members, but still needed four votes for the tax rate to pass. The commission meeting was delayed by nearly an hour Wednesday, until Commissioner Emma Darnell arrived, because without her, the county did not have a quorum to start its meeting.

The county tax rates are just one part of the bill residents will see. Cities and school districts are also setting their tax rates.

Normally, tax bills are sent in August, and money is collected in October. This year, Fulton leaders hope to have the bills in the mail by mid-October, with money due by mid-December.

The bills are delayed because Fulton sent a second round of assessments — in most cases, at the same level they were last year — after residents were shocked to find huge increases in their property values. Fulton County for years had been neglecting assessments that would have kept up with rising values.

Because the tax bills are delayed, Fulton Chief Financial Officer Sharon Whitmore said she expects collections to be lower than usual — 90 percent, as opposed to 96 percent. That translates into about $22 million less in the county coffers at year-end than was originally anticipated.

“Ninety percent, I believe, is an aggressive collection percentage,” Whitmore said.

The county can still collect the tax money into 2018, applying it to 2017’s expenses. But it complicates a process that has already had a wrench thrown in it. Whitmore said departments were under-spending their budgets, so the county probably won’t have to cut staff or programs, even with the delayed revenue.

Fulton had a tight timeline to set its tax rate and must send bills soon: it has to pay back a $200 million loan by Dec. 29, and only has $146 million in reserves, not enough to cover the bill. The expected collections for the county’s general fund should be between $430 million and $435 million, Whitmore said.