Residents are strongly encouraged to attend the upcoming public hearings on property tax in Muscogee County so their voice may be heard as a citizen and may also contact their respective city council members.
COLUMBUS, Ga. — “This is the tendency of all human governments. A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering... And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.” — Thomas Jefferson.
As promised in yesterday’s article on CCG’s proposal to tax an additional $10 million from the pockets of its own residents, here’s a deep-dive into the Columbus Property Tax Increase.
We’ll be breaking down the following:
- What the proposed increase actually is;
- The undesired effects;
- How property taxes are actually calculated;
- How CCG is ignoring the “rollback rate”;
- The problem with “fair market value”;
- What city officials had to say;
- How to appeal your property tax increase;
- How to attend the three public hearings to have your voice heard as a citizen.
Here we go. Buckle up.
THE PROPOSED INCREASE
Muscogee County has assessed a 11% net increase in the county’s tax digest, as briefed by the Board of Assessors Chief Appraiser, Suzanne Widenhouse, during the city council meeting held on May 30.
That means that the total value of all taxable property in the county has been reassessed to be 11% higher than it was last year, and will thus produce millions more tax revenue from the pockets of residents.
The increases in value were allegedly found through the reassessment of property values by the Board of Assessors and are supposed to only account for “real growth” — not the inflated value of every property as the market fluctuates.
That “real growth” includes gains in property value through sale, new construction, or adding additions like pools.
Imagine if you were being taxed on the unrealized gains of your stock portfolio before you sold a holding — because that’s the exact same thing as taxing real property that hasn’t changed hands; you’re being taxed on unrealized property gains.
Quite frankly, it's also not a smart way to tax real property at all, as it disincentivizes development and improvement for everyone from the homeowner to the commercial mogul.
This year, that so-called “real growth” adds up to about $10 million in tax revenue for the City of Columbus — even though things like improvements and pools are still unrealized gains on property that hasn’t even changed hands.
Coincidentally, the $10 million allegedly “found” through property value increases just-so-happens to be the same amount of money that City Manager Isaiah Hugley’s new budget is short for the 2024 fiscal year.
THE UNDESIRED EFFECTS
As with just about anything our local officials seem to do, they become laser-focused on only what they see to be the desired outcome, but pay no mind whatsoever to the secondary, tertiary, and subsequent effects of their actions.
Though officials claim the increase will only be felt by those who have experienced “real growth” on their properties, it will in fact be felt by every single resident in the city throughout our entire local economy — especially those who pay rent.
We're going to make this one really simple for our local officials, since they seem to require the crayola crayon-style math on this one:
If you force property owners to pay tens of thousands more per building in property taxes, they will then be forced to pass that through to their tenants by increasing rents.
All this will accomplish is to make the entire city poorer while the tenants' money winds up in city coffers.
The effects of this will not only be felt by those who own large-scale commercial properties. It will be felt by every citizen in the county who now has to pay a higher rent. Higher rent means fewer dollars to live on.
Having fewer dollars to live on generally correlates with higher rates of violent crime. For the love of all things holy: Think before you do this.
For Pete’s sake. Are you purposefully trying to destroy the city further than it already is?
Think.
HOW PROPERTY TAX IS CALCULATED
Without getting into the nitty-gritty of things like homestead and exemptions, there are three basic key terms to understand on how property is taxed: the so-called “fair market value,” the much-lower
“assessed value, and finally the “millage rate” applied to calculate the property tax due.
Fair Market Value
Through things like inflation, home improvements, or additions, the so-called “fair market value” is said to increase. Roughly speaking, that’s the entirely-subjective number that an appraiser would personally think a property would be worth on the current market. It attempts to place a numismatic value on a commodity when it’s really a physical thing that would be worth different things to different people.
The so-called “fair market value” of a property is the alleged current estimated amount that property can be bought or sold. Why is it alleged and not set in stone? Because we live in a free market economy where people are free to decide what they’re willing to buy and sell things at. The government doesn't tell you what things are worth; you do at the time of sale.
If a buyer and seller happen to agree on a value at the time of an actual sale, then that was the value of the property at that given moment in time. That does not, however, mean that the value of that property remains the same after the sale.
It’s important to remember that anything with perceived value isn't worth anything at all until someone actually buys it from you. You can say your bike is worth a thousand bucks all day long, but if no one wants to buy it from you, then an equilibrium price has not been met. By definition, that means it’s worth less than what you're asking to the potential buyers in your market. You can hold out for a buyer at that “fair market” price all you want, but the very nature of having to hold out indicates that the so-called “fair market value” of that bike didn’t meet what actual buyers value it at in the real-world market.
Nonetheless, your local government is assessing your property taxes based on this subjective so-called “fair market value.”
You can explore more about the problems with so-called “fair market value” a bit more through the hypothetical examples provided later on in the “(Un)Fair Market Value” section of this article.
Assessed value
In Georgia, a property’s tax bill is calculated by multiplying the millage rate by the property’s “assessed value,” which is just 40% of whatever the property’s so-called “fair market value” is.
For example: If a home has a so-called “fair market value” of $150,000, then its “assessed value” would be $60,000 since that is 40% of the property’s alleged “fair market value.”
The “assessed value” of $60,000 would then be multiplied by the county’s millage rate to determine its property tax.
Millage Rate
So there is a thing called a “millage rate.” It’s not as confusing as it sounds.
A mill is just one-tenth of one percent. That’s it. Anytime you see the term “millage rate,” you can think of it like a percentage but just on a smaller scale.
For example: the current millage rate in Muscogee County is 23.321 mills, which is the same as saying the property tax rate is 2.3321%. You just slide the decimal point over one spot to the left and add your percent sign.
THE ROLLBACK DILEMMA
Since we covered above how property values tend to increase as they are reassessed, we understand that the tax revenue collected from them also increases.
Each year, counties in Georgia are legally required to determine what property tax millage rate would produce the same tax revenue as the year before. That lowered hypothetical millage rate is called the rollback rate.
Let’s explore that through a basic example so we can all really wrap our head around it.
An Example
For example: Let's say a county earned $100 in property tax revenue last year through a millage rate of 10 mills (which is just a fancy way of saying there’s a 1% tax rate, as a mill is just a tenth of a percentage point). Then, throughout the year, some of those properties increased in value and other brand new homes were built. As a result, the total value of all taxable property in the county increased; the county is now expected to bring in $112 instead of the original $100, even though the millage rate never changed.
What that hypothetical county would now have to do under Georgia State Law is calculate a rollback rate: the millage rate that would produce the same original $100 it earned the year prior before the total value of taxable properties increased. Since there is now a more valuable tax digest — a term meaning the total value of taxable property in a county — the tax rate can be lower and still produce the same amount of revenue as it did the previous year.
By Georgia State Law, the county would now have to decide if it wants to tax its residents at that lower rollback rate while still producing the same revenue as it did last year, or to keep the rate just as high as it was and now tax people more than they need to be.
In short: since the value of the total tax digest increased, there is an opportunity to keep more of your money by lowering the millage rate, or to keep it high and give more of your money to the county.
If they chose to keep the rate the same, they would actually be taxing residents more.
Muscogee County Rollback
The Columbus Consolidated Government now finds itself in the same predicament. It can choose to either lower the property tax millage rate all the way down to the rollback rate and still earn just as much as it did last year, or it can choose to keep the millage rate just as high as it was and earn another $10 million from your pockets.
That additional $10 million comes from the same place it did in our example above: an increase in the total value of taxable property in Muscogee County. This year, that increase is roughly 11%.
Do you think CCG deserves $10 million more of your money, given the stellar performance of what they’ve already accomplished with the hundreds of millions they already have? See: the violent crime rate; the homicide rate; the poverty rate; the homelessness rate; and so on.
(UN)FAIR MARKET RATE
If a property’s so-called “fair market rate” is to be reassessed every time it has an addition — or a pool, or a screen porch, etc. — then the property owner is less likely to put up the capital to make the improvement in the first place; they know they will only be condemning themselves to a higher “fair market value” and thus pay higher property taxes, even though the property hasn’t felt any realized gain through sale.
Ask yourself why the “fair market rate” of a property changes if the property is not even on the market.
When placed into context, that means that the same property owner who spent their own money to make an improvement will now be charged more money by the government each and every year thereafter, for the mere “privilege” of enjoying the fruits of their own personal labor, which ironically improved development and infrastructure for the city in the first place on that resident’s own dime and risk.
What a way to say “thanks.”
Price Is Subjective
Here’s another hypothetical scenario for your consideration:
Say a buyer purchases a house for $100,000 and moves in. Just a year later, he receives an offer from the same guy who just sold it to him who is now begging to buy it back.
The new owner, however, would incur a huge loss if he were to simply sell it back to the guy at the same price he just bought it for, thanks to closing costs and additional taxes on the sale.
The new owner would also be extremely inconvenienced for having to go through all the trouble again to sell back the house to the old owner, so he decides to demand a $50,000 premium for his troubles.
The old owner agrees to cover all the closing costs, taxes, and pay the $50,000 premium. When all is said and done, the same house was re-sold back to the original owner for $170,000 total.
Did the real value of the property change?
Absolutely not.
Nonetheless, that same exact property would now be taxed on the value of that most-recent sale, even though not a darn thing changed except the tax revenue collected on its new so-called “fair market value” — that is, unless you happened to win an appeal through your local government to keep the original $100,000 value as it originally was prior to the sale.
Fat chance, and good luck.
CITY OFFICIALS’ OWN WORDS
During the city council meeting held on May 23, the Chief Appraiser of the Muscogee County Board of Assessors, Suzanne Widenhouse, briefed council on the property tax situation.
Widenhouse began by informing city council members of the 12% increase, which has since been reassessed to be closer to 11%:
“Our net change to the digest after exemptions so we take out all those frozen homesteads and we take out the things like bond abatements and enterprise zone abatements — those kinds of things — so the net increase to the digest was approximately 12% this year.”
In response to the happily-shocked faces of city council members who were just told that the city would be gaining revenue from a staggering 12% increase in property taxes, Widenhouse explained that the city is merely playing “catch-up” by taxing residents more to keep up with the inflated value of real property due to the pandemic:
“I see some shocked faces. We are still playing catch-up … We made a decision in ‘20 and ‘21 at the height of covid not to make any changes. So, ‘22, we started adjusting the market.”
Widenhouse went on to explain that the current proposal for this year’s increase — which was originally projected to be 12% but was since reassessed to be 11% — was nearly twice as large as the 7% increase taxed to residents just one year before in 2022:
“We were very conservative in the changes that we made last year,” Widenhouse said. “It was a 7% increase last year. This year is the final year of catch-up. So this is, uh, 12% — we, we tried to balance it, um, we didn't want to hit anybody with these massive increases.”
Despite Widenhouse’s words, the proposal to tax the very citizens who put in the effort to improve their own properties still stands.
Councillor Glenn Davis (District 2) then asked Widenhouse to place that 12% increase into simpler terms as far as what it means for the city.
“Would you put that in layman's terms for everybody?” Davis asked. “I don't know if we touched this subject or not enough, but help us understand what a 12% increase in the (tax) digest actually means.”
Widenhouse replied with the amount of revenue the city can expect to bring in from the 12% increase.
“I can do basic math,” Widenhouse said, “and basic math at last year's millage rates for the county overall equates to about ten million dollars.”
Davis replied with excitement that the city would be taxing an additional $10 million from its residents.
“That's good,” Davis said. “That's, that's really good.”
THE APPEALS PROCESS
Widenhouse then discussed the valuation notices sent to property owners in Muscogee County on May 30, explaining that the mailing opened up a 45-day appeal window for residents to protest the alleged “reassessed” value of their properties:
“Notices are going out on Tuesday (May 30). They are at the printer now. That will open a 45-day appeal period. That appeal period will end on Friday, July 14th. Appeals must be hand-delivered to us; they can be mailed if they're postmarked, but we don't accept metered.”
“We have something brand spanking new this year. They (appeals) can be uploaded to us. We have an online appeal module.”
Taxpayers will now have the option to file their appeal online, though the online appeals are limited for real property only, and not on other taxable personal property like boats, etc.
You read that right. CCG had enough foresight and expected so many appeals to be filed that they went through the trouble of building an electronic online module to handle the process. They knew.
Throughout the appeal window from May 30 through July 14, taxpayers can follow the link on the Tax Assessors’ website at www.columbusga.gov/taxassessors to file their appeals online. The online appeal module can also be accessed directly at www.qpublic.net/ga/muscogee.
You can view CCG’s video of the appeal module and how to use it here.
PUBLIC HEARINGS
The Columbus Consolidated Government will be holding three public hearings regarding the proposed increase in property taxes. The meetings will be held in the city council chambers on the second floor of the C. E. “Red” McDaniel City Services Center at 3111 Citizens Way, Columbus, GA 31906.
The three legally-required public hearings are scheduled as follows, with the first two happening in the coming week:
- Tuesday, June 13 at 9:00 a.m.
- Tuesday, June 13 at 6:00 p.m.
- Tuesday, June 20 at 9:00 a.m.
Widenhouse herself even admitted to known inaccuracies in the property tax assessments:
“I mean, we like to think that we're perfect and we get it all right, but we know we don't. There are times where appeals are absolutely the avenue to take. So we want to be able to have that taxpayer have everything that they need. We don't want this to be an adversarial process, and this is just one way to keep it more friendly.”
Residents are strongly encouraged to attend the upcoming public hearings on property tax in Muscogee County so their voice may be heard as a citizen and may also contact their respective city council members.
Facts are stubborn things — and we’ll keep publishing them, whether city officials like them or not.
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