Repeating Inaccurate Statements About Cities and Taxes

The Civic Association Network put on a great candidate forum on Sunday.  A lot of candidates showed up, and many people got the opportunity to meet their potential elected officials.  That’s a great service provided by that organization, and I hope more people will have the chance to meet the candidates later in the year. I appreciate the effort that went into the program; and I certainly appreciate the opportunity to meet some of the candidates.

There was also a forum on the possible creation of a city in our area.   Unfortunately that forum was not as good. I hope that in the future there can be many public discussions on the creation of a city.  I just hope that they are structured in a way that makes it easier to establish a balance in the discussion. The makeup (two people against the current city development and one pro-city person), and the format (questions and answers from a moderator to the panel) made it easy to create a forum against the formation of a city.

And since there was no audience participation in the Q and A, there was no “fact-checking” of what was said. 

As a result, the first answer to the first question was never refuted. That answer repeated three of the most common misstatements about property taxes and government financing. I wish I could have pointed that out at the time, but better late than never. And maybe at some point if accurate statements are made by people, the inaccuracies will stop being repeated.

1.      The first statement was that cities are financed by taking a large amount of property tax from the county and leaving the rest of the county to fend for themselves. I pointed out in a meeting of the forum participants before the event that this clearly wasn’t correct, but it was used anyway. In fact, this statement is so obviously wrong, and has been refuted so many times, normally only politicians use it.

The accurate statement is that only the property taxes collected for the specific services to be performed by the city are transferred to the city. And only those taxes collected within the area of the city go to the city.  The same as Doraville, Clarkston and Decatur.

Anyone who argues that this is bad for the county has to also demand the elimination of Decatur and Chamblee.  They do the same evil thing! They collect money for the services they perform.

Look, this is the same as your TV, cell phone or your gas service. You pay your money to whichever provider you choose.  You’re on Dish, and you decide to change to Comcast. Your money no longer goes to Dish; you pay Comcast.  Next year you can switch to AT&T. That’s not the evil empire at work.

2.      In a second part of the answer to that first question the statement was made that people want to start cities because they can get so much money from property taxes. Another gross but frequent inaccuracy.

The proposed City of Briarcliff would take over Police, roads, parks, zoning and some other services. These are the most expensive of the direct municipal services provided to citizens funded by the county property tax.  Briarcliff would do these services for about 14% of the population of the county, and 11 % of the land mass of the county. It would transfer approximately 5 ½% of the revenue of the county to perform those services. The city is taking a much small proportion of money than of people.

And Property taxes makes up only half of that. So, the massive withdrawal of property taxes from the county to the city consists of about 2 ½% of the revenue of the county. Does anyone hear that massive sucking sound yet?

And the flip side of that statement is also inaccurate. Since the total revenue of the city is much smaller than the County, those property taxes make up a bigger percentage of the total revenue of a city. While it’s 2 ½% of the revenue of the County, it’s about 20% of the revenue of a city like Briarcliff.  That’s certainly important; but it’s not anywhere near a reason to create a city. And no one would consider that as a “major part” of the financing of the city. And it’s certainly not a bonanza to anyone.

Another way to look at it, is to see what cities do. Peachtree Corners, which does municipal services comparable to the Tucker proposal (not as much as Briarcliff or Brookhaven), has no city property tax. NONE! It was such a small amount, they decided they didn’t need it.

3.      A third misstatement was that businesses pay property taxes far more than the services they receive, while residents pay in far less than they receive in services.

Look at your property tax statement. Almost 60% goes to the School System; about 13% for County operations.

Overwhelmingly property taxes are the funding mechanism for the public school system. So immediately it should be obvious that someone who owns a $150,000 home, but has no children in school, pays in more than they receive in services.  And someone who owns a $400,000 home, and has their children in private schools is massively overpaying for the services they are receiving.

But maybe when people say that, they mean to say that they’re only talking about the 13% of your property taxes that go to County operations. Even there, the statement isn't accurate. I saw some analysis that showed that on average homes assessed at over $300,000 pay more in property taxes than they received in services from the County government.  But that is a fallacy of averages.  If you have a $200,000 home, but your streets are not well maintained, your police protection is not good, and your park (if you have one) is not well maintained, then you are paying in to the County a lot more than you have been receiving in services.  Have you been to Scottdale lately! How about Valley Brook or Mason Mill? Or Breckenridge or Sagamore Hills! How’s your park doing? You’re paying for it!

There is no great sucking sound of property taxes being diverted from the good of mankind to a selected few people. Even in the worst example of cherry-picking that’s simply not true. It’s not true of Doraville; it’s not true of Stone Mountain; it’s not true of Chamblee; and it wouldn't be true of Tucker or Briarcliff. It even wouldn't be true of Lakeside.