A proposal to raise the current $10,000 homestead exemption to $40,000 for senior homeowners (age 70-plus) was effectively rejected by the Putnam County Board of Commissioners last week.
The same proposal is being pitched to the Putnam Board of Education by Steve Hersey, who has twice chaired both boards over the past two decades. Hersey was defeated by current District 3 Commissioner Bill Sharp in this spring’s Republican primary in a bid to return to the commission chairmanship after a four-year hiatus.
Hersey based his arguments on calculations involving the 2022 tax digest determined by the board of tax assessors and the county commission’s 2022-23 budget. He said the proposed exemptions would carry no means (income) test and would affect “about” 1,300 homeowners. The proposed exemptions would amount to a $39 million reduction in the county’s 2022 net digest of $2.14 billion and a loss of $265,000 in revenues for the county commission if it did not make up the loss.
The typical problem with granting property tax exemptions is that somebody else usually has to pick up the costs. Hersey estimated a 2.2 percent tax increase for non-qualifiers, on average, that would amount to about $17 a year for each $1,000 of taxation. Seniors, on average, would save about $200 a year.
For the school system, which is more dependent on property taxes than the county commission, the proposal would cost $768,000, and, on average, a tax increase of $48 a year for non-qualifiers. The maximum savings in school taxes for seniors would be $590 a year.
Hersey pitched the proposal as an enticement for Putnam as a retirement destination but added it might also help lower-income homeowners. He did not elaborate on the latter point, however, as any explanation dips into the confusing territory of appraised property values, as set by the board of tax assessors, and assessed values, as used by the board of commissioners and school board in setting millage rates.
The Georgia legislature decades ago created the difference between the two sets of values, which in practical terms is little more than a political gimmick – with one exception.
That exception comes with any exemption being applied to assessed values, not appraised values.
Since assessed values are set at 40 percent of appraised values, the effect is that a $10,000 homestead exemption really means $25,000 in market value and a $40,000 homestead exemption would translate into a $100,000 reduction of tax liability, if thinking in terms of sales (appraised) value. Thus, a lower-income homeowner would not have a tax liability until the dwelling became appraised at $100,000 or more. (Was “confusing territory” mentioned?)
The commissioners did not challenge Hersey’s calculations, instead entertaining a motion from District 4 Commissioner Jeff Wooten to allow the school board to make the decision, with the county commission “probably” going along with it. That motion failed unanimously.
The commission also authorized a public hearing for a zoning ordinance change to allow businesses to display items for sale outside their building, except for the front. It also authorized Chairman Billy Webster to sign letters to the congressional delegation in opposition to allowing larger and longer tractor- trailer trucks on the highways.