On the heels of DeKalb County’s 2011 property tax hike, the millage cap for the proposed City of Brookhaven will be set at 3.35 mills in the Brookhaven city charter as it moves forward in the 2012 session of the General Assembly. In addition, the homestead exemption for city property taxes will be increased from $10,000 to $20,000.
Remember that cityhood does not add property taxes to your tax bill. Instead, it shifts two of the existing county line items to the city, enabling us to keep those resources here at home. If you vote in favor of cityhood at the ballot box this July, it also will slash the rate at which these taxes are charged, cap that rate, and double the applicable homestead exemption.
The millage cap is a mechanism that prevents city property taxes from going higher than a certain rate without approval by the citizens in a public referendum. It is a benefit that does not exist in unincorporated DeKalb County.
What does this mean for you?
It guarantees virtually all homeowners a property tax cut, even if the city council sets the millage rate at the full 3.35 mills.
However, the need for the Brookhaven city council to use the full 3.35 mills is doubtful. Property taxes are likely to be lower than 3.35 mills. In its feasibility study for the proposed city, the Carl Vinson Institute of Government at the University of Georgia (CVI) estimated that expenditures would be $25.1 million. The City of Dunwoody, a similarly situated city in terms of population and geography, anticipates 2012 expenditures of $20.9 million. The new millage cap will reduce the CVI estimated surplus for Brookhaven from $3.4 million to approximately $261,348. Based upon Dunwoody’s actual expenditures, this estimated surplus is in excess of an already generous expenditure estimate.
The $261,348 surplus is on par with the CVI estimated surplus for Dunwoody when it became a city. In the Dunwoody feasibility study published in 2006, CVI projected a surplus of $278,789. In 2009, Dunwoody’s first year of operations, its actual expenditures were roughly $1.75 million less than that. This shows that CVI’s estimates are indeed conservative.
With a $20,000 homestead exemption, the City of Brookhaven would need to charge 3.22 mills to generate revenues equal to its estimated expenditures of $25.1 million. If expenditures are like those of Dunwoody, $20.9 million, then the necessary millage rate drops to 1.16 mills.
Here is a quantification of the real tax dollars associated with the property tax cut that the City of Brookhaven could provide:
A homeowner with a $100,000 assessed property value currently pays DeKalb County $273 for municipal services. That homeowner would pay $93 if Brookhaven’s expenditures equal Dunwoody’s $20.9 million, $258 if Brookhaven’s expenditures equal the CVI estimate of $25.1 million, and $268 if Brookhaven must use the full 3.35 millage cap.
A homeowner with a $200,000 assessed value currently pays DeKalb $610. That homeowner would pay $209 if Brookhaven’s expenditures equal Dunwoody, $580 if Brookhaven’s expenditures equal the CVI estimate, and $603 if Brookhaven must use the full millage cap.
A homeowner with a $300,000 assessed value currently pays DeKalb $946. That homeowner would pay $325 if Brookhaven’s expenditures equal Dunwoody, $902 if Brookhaven’s expenditures equal the CVI estimate, and $938 if Brookhaven must use the full millage cap.
A homeowner with a $400,000 assessed value currently pays DeKalb $1,283. That homeowner would pay $441 if Brookhaven’s expenditures equal Dunwoody, $1,224 if Brookhaven’s expenditures equal the CVI estimate, and $1,273 if Brookhaven must use the full millage cap.
The 3.35 mill cap would lower Brookhaven’s property taxes to a rate less than the 3.5 mills that existed before DeKalb County increased this rate in 2011 to 6.39 mills.
I look forward to working with citizens to bring Brookhaven a more responsive local government that guarantees lower property taxes and lives within its means.