One topic of conversation drowned out all other fiscal concerns when the Hall County Board of Commissioners held its first public hearing this month on the proposed 2015 fiscal year budget.
Indeed, debate about raising wages for county employees, how much funding public safety agencies should receive and whether to dip into the reserve fund to balance the budget were silenced by a theme that has begun to consume the budget process and pit county officials against one another.
The reassessment of property values on 6,558 lakefront homes by the county tax assessor’s office this year has sparked a movement of sorts among local residents, one they hope turns into a full-fledged statewide campaign against property taxes.
The reassessments have driven up taxes on about 90 percent of lakefront properties. The average increase in assessed value is 39 percent, or about $104,000, and this equates to a more than $1,000 hike in taxes, on average, county officials said.
The re-evaluation of properties primarily accounts for a 6.58 percent increase in the overall tax digest, or taxable properties, in the last year.
As a result, the county must roll back the property tax rate to 5.989 mills to remain revenue neutral. Not doing so amounts to a tax increase.
However, county commissioners are considering a budget that keeps the tax rate at 6.25 mills, which would generate about $1.5 million in additional revenue.
A mill represents $1 for each $1,000 in assessed value. Hall County assesses property at 40 percent.
Only Commissioner Craig Lutz has vowed not to vote for a budget that includes a tax increase. He has publicly challenged his fellow board members to honor their pledges not to raise taxes.
Years in the making
The reassessments were a long time coming. For years, perhaps decades, these properties were undervalued, according to Chief Assessor Steve Watson. A state-mandated moratorium on reassessments was in place from 2009 through 2011 — a product of the recession — effectively handcuffing the tax assessor’s office, he added.
As a result, lakefront homeowners have experienced “sticker shock” this year. The reassessments have resulted in a doubling and tripling of taxes for some residents, and called into question the methodology used by the tax assessor’s office to arrive at these values.
Take Drew Leeuwenburg, for example.
His home on Woodlake Drive doubled in value, from about $300,000 to $600,000, this year. He said his property tax bill would jump to more than $8,000 from about $4,000 as a result.
Leeuwenburg, a Realtor, said he turned away tax assessors when they visited his property, asking them to come back another time when he was available. But they never returned.
“They ran out of time and threw a number on a piece of paper,” he said. “And that number is only going to change if I step up to the plate and challenge it.”
Just how many assessment notices had errors is unknown, though the appeals process might clarify this. But there is some concern they might be endemic in the process.
“From calls and visitors to our office by taxpayers, it is my understanding that some districts’ tax assessment notices may have errors on the 2014 estimated tax portion of the notice ...” Tax Commissioner Darla Eden told The Times in an email.
Commission Chairman Richard Mecum, who owns a lakefront home and will pay about $470 more in taxes if the rate remains at 6.25, said he’s OK with the reassessments because for years he’s essentially been given a tax break.
Mecum said lakefront homeowners have not been paying their fair share of taxes, and that even a rollback of the tax rate won’t change the fact these residents will still owe more in taxes this year.
As could be expected, this position earned Mecum boos and grumbles from the audience at the public hearing earlier this month.
What about boat docks?
The reassessments calculate several different things, including land value, home value and boat dock value.
According to his tax notice, Leeuwenburg’s dock was built in 2003 and made of aluminum. But he insists the dock was built in 1990, perhaps earlier, and is made of different material.
He said the tax assessor’s office made the change after he called to complain, but the resulting difference in his tax bill is not enough to satisfy him.
This part of Leeuwenburg’s case tackles one of the finer points in the reassessment process: Should boat docks be classified as real or personal property?
In an email to The Times, Watson wrote, “Boat docks have always been valued as a part of the real property. That is something that has not changed. There is not a precedent necessarily other than that we have been taxing them for as long as I can remember.”
Meanwhile, Eden said she has received inquiries from taxpayers about why boat docks are classified this way.
In an email to The Times, she wrote, “The (Georgia) tax commissioner’s manual defines real property as land and generally anything that is erected, growing or affixed to the land. Tangible personal property is defined as property, other than real, that may be weighed, measured or touched. Essentially, personal property is anything that can be owned that is not real estate. With those definitions, there could be a strong argument to classify docks as real or personal depending on how you define ‘affixed to the land.’”
The upside for owners in classifying docks as personal property is that state law provides a tax exemption for such property valued at less than $7,500.
But Watson isn’t convinced many residents would benefit from such a change.
“While that might be an option, it would be at a greater expense to the taxpayers and ultimately cause some taxpayers to pay more tax,” he said. “So, for example, if someone had an old pontoon boat or Jet Ski valued at $5,000, it is currently not taxable. But if they also had a boat dock valued at $5,000, then with the combined value of the pontoon ... the total account value would be $10,000, thus making the pontoon taxable ...”
The problems don’t end here
Watson said the reassessments were based in part on comparing appraised values with the actual sale prices of lakefront properties.
But lake homeowners are not convinced the assessed value represents a true fair market value.
Leeuwenburg said he would happily sell his home for $500,000 even though the county lists it above $600,000.
“I couldn’t pack quick enough,” he said. “I’m sure it wouldn’t appraise for that.”
But many of the complaints about the reassessments stem from the fact property values increased so dramatically overnight rather than the fact they were done at all.
Indeed, at the county’s public hearing on the budget, several residents who spoke before the board acknowledged the need for the reassessments while lamenting the fact they were not done in increments to spread the tax increases out over several years.
In an email to Commissioner Billy Powell obtained by The Times, resident Ron House, who said he would appeal his reassessment, writes, “I do understand that some of the lake homes that have been around for 20-30 years need to be reassessed.”
Leeuwenburg addressed an alternative that is gaining momentum locally.
“A lot of people are interested in getting a cap put on (property taxes) where they couldn’t do this in one lump sum,” he said.
Resident Greg Smallwood, in an email to commissioners obtained by The Times, wrote, “If we had to have an increase, it should have been capped at a reasonable rate. These are not the best of economic times to hit us with such absurd increases.”
The desire to cap annual property tax increases has spawned a petition drive in Hall County that organizers hope will gain traction in the Georgia General Assembly.
Berly West Baker, who owns a home near Wahoo Creek in North Hall and said her assessed value more than doubled this year, has launched the website www.gataxcap.org in hopes of generating 5,000 or more signatures advocating such a cap.
Moreover, Baker said she is having yard signs, business cards and even ball caps made urging people to sign the petition. She’s even considering running advertisements in The Times.
“We want to make sure this does not happen again,” she said. “We’re going to do whatever we can do to get in people’s faces.”
Baker said she has contacted Gov. Nathan Deal’s office, and is reaching out to local state legislators as well as Republican U.S. Senate candidates Jack Kingston and David Perdue.
The campaign also includes a Facebook page created for county residents to voice their displeasure with the reassessments.
“Our Facebook page has turned into a group of activists trying to get in front of the legislature,” Baker said.
Comments on the page have been pouring in for weeks, even from unlikely sources.
For example, Eden, the tax commissioner, wrote a post on the social media page advising lakefront homeowners with loans to contact their lenders about the possibility of spreading the likely increase in escrow stemming from the tax hikes over additional years.
In response to a comment thanking her for the advice, Eden wrote, “... rest assured, our office is doing the utmost to support our resident’s concerns/questions about notices sent from the tax assessor’s (office).”
Eden has made it a point to tell county residents she is not responsible for the reassessments. In fact, at a South Hall Republican Club meeting earlier this month, she stood up before the gathered audience and said as much.
That leaves Watson, the chief assessor, stuck with handling the brunt of residents’ dissatisfaction.
Watson has attended public forums hosted by Commissioners Scott Gibbs and Billy Powell to address how and why the reassessments were done.
Homeowners have until June 30 to appeal the property valuation, but cannot protest the estimated tax.
There were 2,700 appeals of tax notices made last year, and Watson has said he expects that number to double this year.
Watson told The Times last month his staff would address every appeal and send appraisers out to confirm the valuations.
Revised notices will then be mailed, at which time residents have 30 days to file an appeal with the state Board of Equalization.
In the meantime, Watson is likely to continue making his case because, right or wrong, the reassessments aren’t selling well with some residents. In an email to resident Johnny Carter obtained by The Times, Watson defends the reassessments.
“I understand your concerns when you say ‘singling out,’ however, to the contrary, we’re not ‘singling out’ lakefront property but simply including them in the revaluation process rather than ignoring the disparity.”