Finance Director Donna Williams on Thursday presented the property tax study committee with a few scenarios for changes that she knew would not fly.
“Some are ugly, and some are really ugly,” she said.
The problem with the current system is that property owners in different tax districts pay different amounts for the same services.
The city’s multi-tiered property tax system divides most of the county into two main districts – one urban and one suburban – that roughly coincide with the pre-consolidation political lines between the old city and Richmond County. Each district has a combination of millage and fees that pay for the services, such as trash pickup, fire protection, street lights and law enforcement.
Commission members are seeking solutions that will level out taxes, fees and services for everyone.
The first scenario Williams presented completely did away with the urban tax district and all fees for services, such as street lights and trash pickup. It rolled all those expenses into one flat mill rate for all Augusta property owners.
That plan would require raising taxes by 5.47 mills to produce the $25.4 million in revenue needed. Williams said that would not work because Augusta is limited by a property tax cap that cannot be exceeded by state law.
“That isn’t even a possible scenario,” she said. “It flat-out will not work.”
From there, officials moved on to a system that would also do away with fees, but instead of erasing the urban tax district, it would enlarge it to encompass all of the county.
Williams said this presented other issues that commissioners found distasteful. Primarily, it would increase taxes on suburban dwellers and place a heavy tax load on commercial properties to pay for services, such as garbage pickup.
Commissioner Donnie Smith pointed out that commercial property owners are about to be hit with a stormwater fee. Handing them a bigger property tax bill would be pouring salt in the wound.
“We are going to take a beating, brother,” Smith said.
Committee Chairman Wayne Guilfoyle agreed that it would be very discouraging to the business community.
“We will see boarded-up doors and boarded-up windows if we do this,” he said.
Commissioner Alvin Mason said any solution will be unpopular with a lot of people. He said they needed to dispense with the idea that what they do will be seen as fair for everyone.
“We might as well get out of that mind-set right now,” he said.
Williams recommended that commissioners consider another solution that would do away with the urban district, which would have three components.
First, create a citywide fire tax district that covers everyone. That would still require a fire tax rate for suburban dwellers, but it would not hit the tax cap.
Second, take all fees – garbage, street lights and stormwater – and create a new municipal service bill that would be paid separately from property taxes.
Third, increase the citywide property tax rate slightly to make up for other services funded by the urban district, such as law enforcement.
Committee members agreed to take a look at a more detailed version of that proposal at next month’s meeting.
City Administrator Fred Russell reminded everyone that the clock was ticking and that legislation being considered this year could force their hands. The legislation would require the local government to remove all fees from property tax bills, thus dismantling Augusta’s current system.
“If this passes as written, we can’t do what we are doing now,” Russell said.
Mason said it seemed every solution presented another array of problems.
“Is there a more complex word for ‘complex’? Because that is the word for what this is,” he said.