Fulton County tax digest rejected by state Department of Revenue

7:10 p.m Thursday, Oct. 26, 2017 Local
Dwight Robinson, Fulton’s chief appraiser, said his department is working to resolve issues with the tax digest. HYOSUB SHIN / HSHIN@AJC.COM

The state Department of Revenue has rejected Fulton County’s tax digest, the accounting of the county’s property values, saying it was “questionable” whether county leaders “had the legal authority” to freeze residential values and reissue them.

The move means Fulton County tax bills will be delayed until at least November.

The uncertainty about when tax bills may be sent, and what money could come in when they are, is stressful to governments and residents alike. Fulton County Schools officials called the Department of Revenue’s decision “a severe blow” to its ability to pay bills and employees in the coming weeks.

Chief Financial Officer Robert Morales described the situation as “dire.”

“We are trying to determine how the district will operate without the anticipated tax revenue, and we may need to borrow money to make our payroll and pay our bills,” he said in a written statement.

County officials, including representatives of Fulton County and Atlanta Public Schools, will seek an emergency court order to allow them, the county’s 15 cities and other taxing districts to collect tax revenue while they fix problems with the tax digest. A hearing for a temporary collection order is scheduled Nov. 3.

If a judge approves Fulton’s request for a temporary collection order, tax bills will still have to be printed before they can be sent, said Dwight Robinson, the county’s chief appraiser. In Atlanta, taxes are due 45 days after bills go out. In the rest of the county, the deadline is 60 days after bills are sent, pushing the due date into 2018.

County commissioners took steps to roll back property values this summer after an outcry from residents who were shocked by huge increases to their property values. Nearly a quarter of homeowners in the county received assessments that were up 50 percent or more. Half of the county’s nearly 320,000 parcels saw assessments that were at least 20 percent higher.

County leaders decided to freeze residential property values at 2016 levels. But before they could send tax bills, the state Department of Revenue had to approve the tax digest.

The Department of Revenue’s seven-page letter to Fulton Tax Commissioner Arthur Ferdinand had a laundry list of errors in the digest that was submitted earlier this month. But the “4,000-pound gorilla in the room” was commissioners’ dependence on an obscure law, from the 1880s, that they used to justify reducing property values after assessments first went out this spring, Robinson said.

In the letter, Local Government Services Director Ellen Mills said it was “questionable” whether the county had the legal authority to send new notices. Once they did, county leaders declared any appeals that had already been filed null and void, Mills wrote, truncating their rights and likely ensuring that not all appeals were properly accounted for. Additionally, she wrote, the county assessed properties far below the fair market value.

The last time a county tax digest was rejected was Wayne County’s, in 2014, Department of Revenue spokesman William Gaston said.

In a statement, Fulton County spokesperson Jessica Corbitt said county commissioners “took an innovative approach that was necessary to protect homeowners from financial harm in the face of swiftly rising property assessments” when they froze residential values. She did not respond to repeated requests for comment about the implications of the rejection. Neither did Bob Ellis, the vice chairman of the county commission.

John Eaves, the Fulton County chairman who resigned to run for mayor of Atlanta, said it was “mind-boggling” that Department of Revenue officials rejected the digest so late in the process. Eaves said he had made the state aware of the county’s plans, and no one had interceded.

“To get a ruling at this point is just unbelievable,” Eaves said. “To me, there was a degree of complicity. We did it all in a transparent way.”

Clint Mueller, the legislative director for the Association County Commissioners of Georgia, said it was the first time he had heard of any county government trying to take control of the assessment process in this way. Mueller said while the county was responding to the concerns of residents, the strategy was “suspect at best.” Burt Manning, a former Fulton chief appraiser, said it looks like the county “probably made a mistake” in freezing values.

Fulton County officials said previously that they needed to send tax bills by the end of October in order to cover their own bills. The county has a $200 million loan that it has to pay back by year’s end.

Atlanta Public Schools already cut $4 million from the district budget and took out a $100 million loan to solve immediate cash-flow problems caused by earlier delays in the assessment process.

Now, Atlanta school officials are hustling to figure out how to repay that loan, which is due by the end of December.

“We are honestly looking at every available opportunity we have,” said the district’s chief financial officer, Lisa Bracken. “This is just so out of the norm that… there’s not a lot of precedent.”

In Hapeville, interim city manager Tim Young said the city is having a hard time determining its financial priorities as it waits to find out how much tax revenue will come in. Hapeville is putting off capital expenditures like new police cars, he said, and may have to borrow money to pay for its operations.

“It’s frustrating,” Young said. “When you have a good, reasonable sense of what’s coming in, you can make plans.”

David Hodgins, an Atlanta resident who is awaiting his tax bill, had a 60 percent increase in his property value before values were lowered. He said not knowing what he might have to pay makes it hard to budget.

“It’s going to cause a lot of chaos for people’s personal finances,” he said. “It’s extremely frustrating. This is one of the basic things the county’s supposed to do.”

After freezing residential property values at 2016 levels, Fulton County planned to send its already-delayed tax bills by the end of October.

But this week, the state Department of Revenue rejected the county’s tax digest.

The county needed the state to approve its digest in order to send those bills.

In the meantime, Fulton officials will ask a judge for a temporary collection order to allow them to send tax bills while they fix the issues with the digest.

That hearing is scheduled for Nov. 3. If a judge approves the temporary collection order, tax bills will likely be sent later in November.

In Atlanta, bills are due 45 days after the notice is sent. In the rest of Fulton, residents have 60 days to pay. Delaying the notices will delay revenue collections needed to operate schools and governments.

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