TRUE COST OF SENIOR SCHOOL TAX EXEMPTION AND EXPECTED EFFECTS ON BARTOW COUNTY

Transcription

1 TRUE COST OF SENIOR SCHOOL TAX EXEMPTION AND EXPECTED EFFECTS ON BARTOW COUNTY The following four pages are presented in the form of lecture notes intended to evaluate and discuss the true cost of implementing an improved Senior School Tax Exemption in Bartow County. The final page shows the expected benefits that a meaningful Senior School Tax Exemption will bring to the county and the county s school system. To be meaningful, a Senior School Tax Exemption must do two things: It must be sufficiently high to fully exempt most Senior-owned homes in the county, and It must be sufficiently high and inclusive enough to attract affluent, working adults in the age range of 50 to 64 years to build and buy their future retirement homes in the county. I prepared this presentation envisioning myself in front of a class room explaining it to interested students. The diagrams are what I would be drawing on the white board. The text is a summary of my discussion that would accompany the diagrams. The numbers on the first diagram are estimates based on publicly available information contained in Bartow County s 2017 Tax Digest and in the county school system s, with some additional information provided in response to a request to the county assessor s office. Based on the sources, I consider the numbers to be accurate. This is not a difficult concept to evaluate and explain. What has proved to be more difficult is convincing individuals who have preconceived notions, whose minds are closed, and who take a narrow view of how the economics would work. Consider the presentation with an open mind. It s not short. I cannot put it on a bumper sticker, but I think it is worth reading. Based on current, Bartow County School System budget and current 2017 Bartow County School Tax collection and sources as shown in the on-line Georgia Consolidated Tax Digest Summary, one surprising almost startling conclusion is this: If annual Bartow County School Tax collected from Senior homeowners age 65 years and older were reduced to zero, then the average increased individual School Tax required from younger homeowners to keep the local revenue to the school system from dropping is less than $60 per year ($5 per month) per individual homeowner. If you have a rebuttal other than I don t believe it or I don t like it or It s not what Dr. XYZ, PhD told me or It doesn t seem right or It s not in keeping with my general economic philosophy then I will certainly seriously consider that rebuttal. However, for any rebuttal to be seriously considered, it needs to include numbers not just hand-waving arguments and cries that the sky may be falling, or the numbers are lying. If you have any questions, I invite you to get in touch with me by at BartowBobJackson@msn.com. If you are more comfortable talking, then send me an request, and I will provide a phone number. Bob Jackson 05/09/2018

2 EFFECTS OF ELIMINATING SCHOOL TAX COLLECTION FROM SENIOR HOMEOWNERS -- PG $11.1M $2M $6.0M $43.9M $115.5M Starting Point: Current Senior School Tax Exemption is $40,000 of assessed value. This is a visual model of revenue sources currently received by the Bartow County School System. It will be used to discuss the effects of enacting a Senior School Tax Exemption exempting Senior Homeowner age 65 and over from school taxes. Currently Senior pay a total of approximately $2,000,000 in county school tax. sources of local tax revenue are approximately as shown in the diagram. property tax revenue received by the Bartow County School System is approximately $43.9 million. Total revenue received from local, state and federal sources that is used for instruction, administration, operation, and maintenance is approximately $115.5 million.

3 EFFECTS OF ELIMINATING SCHOOL TAX COLLECTION FROM SENIOR HOMEOWNERS -- PG $11.1M $2M $6.0M $41.9M $113.5M Effect of Not Collecting School Tax from Any Senior No Changes. This sketch shows the effect of eliminating all school tax revenue currently collected from Senior. If no other changes occurred, then the total local school tax collection would decrease from $43.9 million to $41.9 million; and the total Bartow County School System revenue would decrease from $115.5 million to $113.5 million, a decrease of 1.7 percent.

4 EFFECTS OF ELIMINATING SCHOOL TAX COLLECTION FROM SENIOR HOMEOWNERS -- PG $11.7M $2M $6.3M () ($0.6M) $4.7M $11.8M ($0.5M) $5.2M $4.2M $43.9M $115.5M Changes in Collected Tax Required to Maintain Current to the School System This figure shows the increase in local tax revenue that would be required from each taxed category if the school system required that its original local revenue not be decreased. From local homeowners a total increase in property tax of $600,000 would be needed. There are approximately 10,700 homeowners in the county school district younger than 65 years old. So, this would result in AT MOST an increase of less than $60 in annual property tax bill for home-owners younger than 65. From other local residential property, a total property tax increase of $500,000 would be needed. From owners of commercial, industrial, utility and other non-residential property, total increases of approximately $300,000; $200,000; $200,000; and $200,000, respectively, would be needed. However, the only way that these increases would really occur is if a wall were built around Bartow County, no new people were allowed to move in, and no new residential building occurred in the county.

5 EFFECTS OF ELIMINATING SCHOOL TAX COLLECTION FROM SENIOR HOMEOWNERS -- PG 4 Bartow County Becomes More Attractive to 65+ Homeowner Tax Base Increases $2M Increases because of more affluent homeowners INCREASES $43.9M+ $115.5M+ Expected Increase in Occurs WITHOUT Millage Rate Increase or Tax Burden Shift This sketch shows the expected county-wide effect of an increased Senior School Tax exemption like what is in Paulding or Cherokee Counties. Bartow County becomes much more attractive for affluent, working adults in age range years old to move into. They will be attracted both by the county's natural and cultural attractions and by the expectation that they can RETIRE in Bartow and have reasonable property tax, comparable to other adjacent counties. These new move-ins will INCREASE the school tax base and will pay the full school tax rate for years on new, high-value residential property, before they reach age 65. This additional population will also reasonably lead to increased commercial development which will contribute to another increased tax base for the school system. The over-all and reasonably near-term effect is expected to be an INCREASE in property tax revenue going to the school system WITHOUT the necessity of raising the millage rate.