Although Gainesville officials said it was “just a thought,” talk of looking into “public safety” taxes or fees for the area’s property tax-exempt entities surfaced Friday at the City Council’s work retreat.
The mayor and council brought up gauging the interest level of the Georgia Municipal Association and its associated cities, including Gainesville, in talking with state lawmakers about legislation that would allow municipalities to asses a public safety tax or fee for organizations not required to pay property taxes, including nonprofits and churches.
Although those entities are exempt from property taxes, council members said the city still is obligated to provide them public safety services, including fire and police coverage.
“It’s a huge expense to us and it looks like our nonprofits, our tax-exempt properties keep increasing,” Mayor Danny Dunagan said. “Then it’s the burden on the citizens that pay the taxes.”
City officials say the three biggest entities exempt from property taxes total nearly $300 million in property value, the largest being the Northeast Georgia Health System at $167 million. Riverside Military Academy comes in at No. 2 with $90 million in property value, then Brenau University at $37 million.
“We furnish these entities with public safety and we just thought — just a thought — that maybe they need to share in the public safety costs,” Dunagan said.
He has support on the council.
“If they add expense to our budget and yet don’t pay any taxes, I think, in all fairness, they should be paying something,” Councilman George Wangemann said.
Wangemann said he would “prefer a user fee” per services rendered. That, he said, would be the “most fair way,” but would be hard to track.
“If that weren’t possible, then I could agree with the tax,” Wangemann said.
Councilman Bob Hamrick said he agrees with the potential taxes or fees and that the council would do some “legal research to see what we can do.”
To instate such a tax or fee, the General Assembly would have to pass legislation allowing it.
Gainesville officials plan to talk with the municipal association on the matter.
“I think we need to get with our association to see what their thoughts are on it and for them to help us with the possibility of some legislation,” Dunagan said. “It’s something we need to talk to them about.”
Other cities have shared similar feelings, according to Gainesville officials.
“We’ve heard some mention it,” City Manager Kip Padgett said. “It’s a burden because as your exempt properties grow, they still require those public safety services.”
In an email response, Melissa Tymchuck, spokeswoman for the health system, said a part of the system’s not-for-profit mission is to provide health care services for the community’s indigent population.
“In fiscal year 2011, we incurred a cost of $26.5 million in indigent care; $15.6 million of that was provided to Gainesville and Hall County residents,” Tymchuck wrote. “We are pleased to be able to do this at no tax expense to our local residents, unlike many hospitals in Georgia who do receive local tax funding to offset the cost of the indigent care they provide. These figures do not include the amount of bad debt we incur for those who do not qualify for charity care but are also unable to pay their bills. The amount of bad debt we incurred in fiscal year 2011 was a cost of $16.2 million to our organization.”
City officials said public safety makes up 61 percent of its nearly $28 million budget.
Council members said the conversation would likely continue.