COVINGTON -- Newton County's tax digest could fall as much as 10 to 12 percent short of projections, and maybe more if new legislation is passed, according to Chief Appraiser Tommy Knight.
Knight painted a bleak picture for commissioners during a presentation on the tax digest at Tuesday night's work session.
Knight said real estate values are down overall about 10 percent. Normally, such a shortfall would be offset by other taxes, such as motor vehicle, heavy equipment and public utilities, but those values are also declining, Knight said.
Motor vehicle values are expected to decrease by as much as 11 percent, from $242 million to $217 million.
"Motor vehicle values usually go up because cars on the road increase," Knight said in a follow-up interview. "But when the price of gas goes up, the value of trucks and SUVs drops tremendously."
The value of public utilities infrastructure, such as Georgia Power, Atlanta Gas Light and CSX Railroad, has historically increased from year to year, but this year, values are expected to decrease by $7 million to $8 million, he said.
In addition, Tax Commissioner Barbara Dingler's office has yet to process about 600 homestead exemptions and not all freeport exemptions have been calculated, and that could further impact the digest.
Initially, Knight predicted a 5 to 7 percent decline in the digest, but on Tuesday night he said 7 percent may be a conservative number.
"I wouldn't be surprised to see a 10 to 12 percent decrease in the digest," he said.
Last year's digest was at about $2.75 billion.
"We have advised department managers and elected officials to anticipate at least a 10 percent reduction in the fiscal year 2011 budget as a result of the changes in the tax digest discussed with the BOC at Tuesday night's work session," said Administrative Officer John Middleton.
Knight said the digest could be affected even more if legislation proposed to overhaul the state's tax system is passed by the General Assembly. Senate Bill 346 is proposed by Georgia Senate Majority Leader Chip Rogers, R-Woodstock, who said the current way counties collect taxes needs fixing and assessed property values have not kept up with actual values.
The bill would require counties to mail assessment notices to all property owners every year, even if there is no change in property value. Normally, Newton County mails assessment notices only when a there is a change in value.
In addition to costing the county extra money, that new requirement would also delay collections and submission of Newton County's tax digest, and ultimately may force the county to change its billing process and budgeting process, Knight said.
Currently, Newton is one of five counties that does split billing, allowing property owners to pay half their bills in September and half in December.
To do that, tax bills are mailed out by July 20 to meet the 60-day notice requirement in order to begin collections Sept. 20.
Notices are sent out by mid-April, but now, because counties would be required to use a state-designed form, that will likely be delayed until early or mid-May on account of the time it will take the state to produce the form, Knight said. Add an additional seven to 10 days to get the new form formatted into the appraisal software, which would be a county expense, and notices would likely be delayed until the end of May, which is typically the time the digest is approved.
With the appeals timeline expanded from 30 to 45 days under the new law, the appeal deadline would be in mid-July, normally the time bills are sent out. The advertising process would take another month, meaning the digest could not be approved until the end of August. A 60-day notification to taxpayers would mean the county could not collect until mid-October.
The law would also require that commercial and industrial properties be valued every year. Currently, Newton County values those properties every third year.
"If you send out an assessment notice to commercial and industrial property owners every year that opens up the opportunity for them to appeal every year. You're talking about large sums of money," Knight said, noting that the top 25 industries in the county have more than $200 million in taxable property that could be appealed. "If you don't know the status of the appeal and don't know what the final value is set at, that makes it difficult to set a millage rate and budget when you don't know what's coming through on the revenue side. This will have a crippling effect on local governments."
Though the law would allow a county to get its digest approved despite large amounts of outstanding appeals, Knight said the budget process would be impossible because revenue projections would be based on digest numbers not yet finalized.
The law would also require the assessors office to send out an estimated tax bill to property owners yearly, which could be confusing, Knight said.
"People will want to appeal the taxes they pay when, in fact, it's the value of property that can be appealed. If this law passes it will give the property owner the perception they have the right to appeal the amount of taxes, when that's not an appealable issue."
If passed, the law would be retroactive to Jan. 1, but the additional money it would take to implement the changes is not in the tax assessors budget, Knight said.
BOC Chairman Kathy Morgan said she would draft a letter outlining the county's concerns with the bill to the local legislative delegation.
News Editor Jay Jones contributed to this story.