Department of Audits study means less public utility tax revenue
The Gilmer Tax Assessors Office is accustomed to handling value appeals from property owners each year.
This year, the office will also be handling its own appeal to the state, which is being filed by the county in response to a low property sales ratio that impacts how much public utility tax revenue can be collected.
A recent sales ratio study by the Georgia Department of Audits determined the county’s overall sales (or “equalization”) ratio for 2021 is 35.88.
State guidelines say that percentage needs to be above 36 for compliance purposes, and counties need to be between 38 and 42 to collect public utility taxes at the full rate. The ratio is intended to measure the accuracy of property assessments by comparing assessed values to actual sales prices.
At an assessor board meeting last Thursday, Chief Appraiser Theresa Gooch told board members Bill Logan, Jerry Davis, Gary Engel, Tom Porter and John Williamson she’s already asked the board of commissioners to file an appeal with the Department of Audits, which they agreed to do. After that, the assessors office will handle appeal negotiations and discussion.
“The (ratio) significantly dropped within one year compared to previous years. (But) our numbers show we are in compliance and in line,” Gooch said.
Gooch noted the low ratio stems from some new methodology being used by the state this year, as well as the ever-increasing prices being paid for homes here.
“The study is based on the Department of Audits using 2021 sales and comparing to 2021 values. We use 2020 sales to set 2021 values. We are a year behind,” Gooch said.
So far this year, 96 Georgia counties have received ratios that are less than 38, which is around where the assessors office expected the DOA’s ratio number to land.
“They’re facing the same situation as us. It’s been a long time since anybody’s had these types of figures,” Gooch said. “I don’t want to speak directly for the (other) counties, but, from what I understand, a lot of assessors offices are going to ask their board of education or commissioners to file an appeal.”
The assessors office could ask for some of the sample property sales the DOA used in the study to be thrown out and more of an adjustment to be made to account for the climbing sales prices.
“We found parcels that were used in this study, (which are) sales that we feel are not qualified,” Gooch said.
The Department of Audits made a 10 percent adjustment on sales prices in Gilmer to account for rising property prices, but Gooch said that adjustment was too small.
“We feel that’s not enough given the volumes of sales and the price sales we’ve been seeing the last two years. Residential alone grew about 28 percent this year. We couldn’t have used those 2021 sales to meet this kind of value,” she added.
Gooch said the DOA determines the ratio for the “to deal with the equalization of school money.” However, the state Department of Revenue also uses the same study and numbers every three years to grade assessors offices on the tax digest values they’ve determined.
If this was a review year, the county could also be facing a $5 per parcel fine due to the ratio. It’s not, but next year is, Gooch said.
“I think it’s important to get our voice heard and put it on the record. For this type of drop in a one-year period, I think there needs to be more consideration given,” she added. “The plan will be to sit down with the Department of Audits and go over all of our information and findings. I can’t say for sure what the outcome is going to be.”
Gooch said the tax commissioner’s office will have to tax public utilities based on the 35.88 ratio. That could mean a loss of about $84,000 between the school board and commissioners, she noted.
If the appeal is successful and further adjustments are eventually made, the county will be able to bill utilities at a higher rate to collect the difference. When asked by Engel how long the appeal process could take, county attorney David Clark said it will not be overnight.
Gooch said the number of counties in the same situation is a contributing factor.
“I don’t think they’ve had this many counties fall in this type of area before. I think that’s why it may take a little bit to get through the process,” she added.