Pressure coming from property owners around the new campuses of Children’s Healthcare of Atlanta Emory Healthcare in Executive Park has city leaders looking to create special tax districts for future annexations. Those areas would continue to pay DeKalb’s higher tax rates to cover costs for road, stormwater, parks and other infrastructure repairs.
As more property owners in unincorporated DeKalb County seek to become part of a city, including Brookhaven, due in part to lower taxes, city officials say they must find a way ensure any potential annexations are not “draining the current tax base” to cover infrastructure repairs. Last year, a developer tried to get annexed after failing to receive county approval for a project at the busy Briarcliff and Clairmont roads intersection.
“We want to make sure any annexed area into the city is not draining the current tax base,” said Councilmember Joe Gebbia. Gebbia said he pitched the idea to the council. Gebbia represents District 4, south of I-85, the only area that is adjacent to unincorporated neighborhoods.
“There have been rumblings over the years … about what would a map look like if DeKalb is fully municipalized,” Gebbia said. “We need a policy now on how to handle taxes, so it doesn’t encumber our current property owners.”
Property owners annexed into the city of Brookhaven will be put into a “special tax district” and pay DeKalb County’s higher tax rates to cover costs for infrastructure improvements in their neighborhoods. City leaders say the new policy ensures tax dollars from existing property owners aren’t used to fix what the county failed to do. There is no cap to the amount of time a special tax district is in place.
City staff members are now working to determine a funding formula to implement the policy when considering an area for annexation after the City Council approved the policy to create the special tax districts in September.
The idea is that after an area is annexed into the city, the property owners continue to pay their same unincorporated DeKalb tax rates until the infrastructure repairs are completed to bring them up to city standards. The unincorporated DeKalb County total annual millage rate is 43.890, while Brookhaven’s total annual millage rate is 40.114, according to an analysis by the city.
For example, the newly annexed areas would continue to pay 4.775 mills for DeKalb Police services even though they would no longer get that service. Those tax dollars would then be used specifically to pay for any needed maintenance and repairs.
The city standards will be based on assessments city staff would have just one year to complete after an annexation is made.
The city does not seek to annex areas but considers requests that have signatures from at least 60% of homeowners and 70% of registered voters. No requests for annexation are currently being considered by the city.
Gebbia said the idea of having the former DeKalb residents having their tax dollars go directly to making infrastructure repairs is “pretty original and forward-thinking.”
“We want this to be addressed as equitably and fairly as possible,” he said.
This story has been updated with a correction. It previously said special tax districts for new annexations would be in place for up to one year. There is no cap on the time they are to be in place. The time would be determined by how much infrastructure repairs would need to be made, according to the city.