Panel takes on Augusta's property tax system

Augusta officials who spent part of Wednesday afternoon teasing out issues associated with the city’s inequitable tax system concluded that fixing it isn’t going to be easy but needs to be done.

City Administrator Fred Russell said it boils down to one question: “If we are one city and the service levels are the same, shouldn’t everyone be taxed the same?”

Augusta Commission member Jerry Brigham said he assembled the panel of officials to work toward that goal.

Those attending were Tax Commissioner Steven Kendrick, Chief Assessor Alveno Ross, Finance Director Donna Williams and city attorney Andrew MacKenzie.

Wednesday’s meeting also attracted several others, including Mayor Deke Copenhaver and the solid waste director, Mark Johnson.

Brigham said changes to state law are expected to affect how taxes are collected and how much revenue governments can expect in 2013, so they should begin now.

“Next year is the time to do it because of all the things that are going on,” Brigham said. “So if you fix it then, you won’t have to fix it twice.”

Augusta’s two-tiered property tax system was constructed in the legislation that consolidated the city and county governments in 1995. MacKenzie said it continued the tax structures of the two former governments without much change. Ever since then, additional taxes and fees have further complicated the system.

The result is that taxpayers with homes of similar values pay different rates for the same services, depending on where they live, and sometimes the disparity can amount to hundreds of dollars.

MacKenzie said that the commission has the power to alter the tax system by abolishing tax districts and creating new ones, according to the consolidation law.

“So that is a simple act of the commission,” Brigham said. “You just need six votes to change it.”

The panel spent most of the meeting discussing one of the stickiest problems – what to do about the way trash fees are assessed and collected. In the current system, some pay a flat fee and others pay a combination of fees and millage, but both are collected as part of yearly property tax bills.

Officials expect they will have to change that system next year. Kendrick said there is legislation waiting to be passed that will force governments to remove fees from tax bills.

If Augusta disconnects its trash funding from the property tax bills, it will be forced to create another bill for users to pay for the service. How that will be done and who will be responsible haven’t been determined.

Officials say the advantage to the current system is a high collection rate – most people pay their property taxes. Billing for the service separately will mean a reduced collection rate and higher costs, because the bills will need to go out more often.

“The (trash) fee will go up because of the bad-debt collection rates,” Johnson said.

Officials want to avoid that, because they know it will be unpopular with taxpayers. Kendrick said he would like to see a solution that keeps the trash system funded through tax rates.

Another aspect officials must consider is timing. Officials say the best time to begin implementing these changes would be in January, so changes to tax districts and millage can be reflected on next year’s property tax bills.

“If you are going to stir the pot, now is the time to do it,” Russell said.

Officials agreed to study different aspects of the tax issue and meet again in two weeks. Most agreed that the result will likely make some – perhaps many – taxpayers unhappy. Kendrick said they were going to have to make some unpopular decisions, but it would be better than the status quo.

“If we are going to get beat up, let’s get beat up trying to do something, rather than die this slow death of incompetence,” he said.

Panel will hunt fix for Augusta's property tax system
Resolving county's property tax system might be explored
Disparity exists in Augusta's property tax system
Augusta to raise taxes in urban, suburban districts
Tax increase won't affect all Augusta property owners

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