I recently received the following comment from a concerned Sandy Springs advocate after he read my letter to the editor in a recent Sandy Springs Reporter issue: “I have a question. How and when did the city council increase our taxes?”
Below is my explanation as to the how. The when answer is this year, 2008.
After receiving my response, the same person wrote back, “Thanks, Jim. I can understand that. You should post this to your blog — I’m sure most people (like me) have no clue that this is going on. I will share this with my neighbors whose e-mail addresses I have, but how can we get the word out to the rest of the city?”
So here’s my attempt at describing the Increase Tax Scenario for Sandy Springs (as simply as I can).
(1) The city sets a budget.
(2) The city establishes a millage rate plus an expected collection rate of taxes billed at that millage rate (4.731 mills, a percentage applied to the assessed property values). The millage rate has a maximum that cannot be raised without a referendum, but the expected “collection rate” is set low, like 8 percent lower than the tax collector’s historical collection rates. The assessed property value times the millage rate times the expected collection rate equals the budgeted revenue, which we’ll call A. The assessed property value times the millage rate times the actual collection rate equals the tax money collected, which we’ll call B. B minus A equals a tax increase.
(3) The city confirms the budget.
(4) Arthur Ferdinand, the tax collector, exceeds the city’s budgeted collection rate.
(5) The collection of taxes over the budgeted amount goes into a “general fund.”
(6) The city now has a surplus (even over the amount budgeted as a surplus). Our City Council members decided their constituents wanted them to spend this “extra” money (many millions of dollars) on unbudgeted items.
(7) If the city’s tax collection in dollars is over the budged amount and the city intends to “keep” this over-collection instead of refunding it to the taxpayers, the state requires the city to disclose this as a tax increase because it is a tax increase.
(1) The county tax assessor’s office reassesses the property in the city (Sandy Springs’ property tax digest went up significantly year over year). Home assessments went up moderately from year to year, but the business assessments went up dramatically year to year. That’s a big problem for business but a potential windfall in taxes for the City Council.
(2) The city sets a new budget with the same millage rate that produced the tax increase in Year 1, but now at the much higher property tax digest amount. Real-dollar collection increases are significant. Percentages stay the same.
(3) Items 2, 3, 4, 5, 6 and 7 from Year 1 are repeated.
Years 3, 4, 5, etc.:
Taxes keep going up, up, up, unless the constituency requires the City Council to adhere to strict fiscal policies of spending for necessary services only, refunding amounts collected over the budget and lowering the millage rate for the next year based on proper budgeting, which includes setting the expected collections at the tax collector’s historical rates, not some arbitrarily low number. I’m OK with being conservative on collection rates if they refund any over-collection and don’t act like a bunch of kids and find something to spend the money on.
OK, sorry about my continued rant. If this didn’t make sense to you, I’ll be happy to explain it further. Because this process is complicated to explain and understand, the City Council can easily trap the taxpayers into a cycle of never-ending tax increases.
Hope this helps.
Jim Buckler runs the Web site www.sandyspringsadvocate.com and can be reached at firstname.lastname@example.org.