June 6, 2017

It is absolutely critical that citizens participate in the town hall meetings that have been scheduled to discuss the huge spike in property taxes being levied on Milton residents.

We appreciate that County Council representatives Liz Hausmann and Bob Ellis have scheduled town hall meetings to discuss the property tax hikes.  It is a good first step.  However, we will be looking for more than listening and talk from our representatives.  We need action, including an independent investigation and a freeze on all assessments (i.e., application of 2016 assessments) until this situation is resolved.

This is not the Milton Coalition’s first rodeo.  If citizens show up in large numbers and civilly, but directly, express their concern and dissatisfaction, there is a much higher probability that our representatives will take action.  Citizens, do not rely on other citizens to show up and advocate on your behalf.  Right now, there is a lot of backlash on this issue; we need to capitalize on that discontent to achieve tax fairness and justice.

Following are the details of the town hall meetings:

Date: Thursday, June 8, 2017 Time: 6:30 p.m. Location: Fulton County Water Resources Operation Center, 11575 Maxwell Road Host: Fulton County Commission Vice Chairman, Bob Ellis, District 2	Date: Wednesday, June 14, 2017 Time: 7:00 p.m. Location: Johns Creek Environmental Campus, 8100 Holcomb Bridge Road Host: Fulton County Commissioner Liz Hausmann, District 1

SEE YOU THERE!

(We will be publishing other posts in advance of these meetings to better prepare citizens.)

June 5, 2017

Several of you have written to us about what role, if any, was played by City Council in the recent (2017) spike in property tax assessments.  The answer is that City Council is partly responsible for the property tax increases.  Please read on for an explanation . . .

It is true that the City of Milton does not perform the actual calculations of appraised value.  That function is performed by Fulton County.  The results are then provided to the City of Milton, which calculates taxes based on the millage rate, appraised value, etc.  From what we understand (and we are verifying this), appraised value is a function of 1) the value of the lot and the 2) value of the actual house on the lot.

The value of a developed lot is tied to raw land prices—i.e., the value of an undeveloped lot.  This is important as raw land prices in Milton have skyrocketed.  The Milton Coalition looked at 4 undeveloped parcels and found a 178% increase in the appraisals for these parcels.  And as we know, increasingly the land that is available for development in Milton is becoming more marginal.  This is typical as developers tend to cherry-pick the best parcels of land for development, leaving more marginal land to later development.  This marginal land tends to be bought by land speculators that have found (or are looking for) loopholes to allow more profitable development of land.  These same land speculators often concoct schemes to bend, break, and change the rules to their benefit.  Their dubious schemes often end up before Milton City Council, where they get a sympathetic ear.  Three council members (Lusk, Thurman, and Kunz) are reliable votes for virtually any ridiculous request from developers/land speculators.  Accordingly, developers need only find one additional vote to get their requests approved.

So the takeaway is that developers and land speculators are willing to pay sky-high prices for increasingly marginal land in Milton because they know Council will endorse their schemes to profitably develop these properties.  And even if a developer miscalculates, he knows he can likely convince Council to approve variances to correct for his mistakes.  In short, Council is interfering in the market for undeveloped land in Milton.  Its approval of schemes to increase density helps drive up the price of marginal land.  Speculators are thus able to largely shift their risk to you, the citizens of Milton.  Government interference in markets predictably causes distortions in those markets to the detriment of citizens.  There is only upside for developers; Milton’s City Council absorbs the downside and passes it through to citizens.  Concerned citizens, this is Economics 101.  If marginal land can be developed more profitably, then developers will pay more for it.  So how does this affect you as a citizen?  Well, it affects you in a number of ways:

• Reduction in Milton’s quality of life. All of these developer schemes involve Council granting higher density than would be allowed under existing zoning.  More homes mean more cars on the road, more kids in our jam-packed schools, slower internet connections, more/faster degradation of infrastructure, etc.
• Inflated property taxes. Property tax appraisals shoot up and not just on raw land.  Undeveloped land influences the value of developed lots, causing increases in valuations of your homes.
• Imminent real estate bust. Milton is in danger of a real estate collapse.  Currently, we are experiencing a real estate bubble.  If raw land prices have truly increased more than 100% and home prices in areas of Milton have truly increased more than 50%, we are in for a hard landing.  Because of Council’s aiding and abetting of developers, there is clearly a building boom occurring in Milton.  Increasingly, builders are gambling on spec homes.  It is easy to predict a glut of unsold homes in the near future in Milton.  Such a glut will lead to a bust and all that entails:  abandoned, half-finished subdivisions; foreclosures; seizing up of the real estate market; etc.  Remember 2008-2012?
• Acceleration in the loss of farms, greenspace, and equestrian properties.
• Less bang for the greenspace buck. Skyrocketing raw land prices means that Milton’s greenspace bond money will buy much less land than we might have purchased just a few years ago.

Clearly, Fulton County has erred in its calculations of Milton property values.  Many estimates are inflated and bear no resemblance to reality.  However, it is also true that the actions of Milton City Council have created an unsustainable real estate bubble (i.e., overly inflated housing/land prices) in Milton that has attracted many pigs to the trough.  So yes, Milton City Council does bear some blame for the current property tax debacle.  And Council needs to start owning the problem and taking corrective actions . . . before it is too late.  A good start would be to stop interfering (e.g., approving rezonings) with Milton’s real estate market on behalf of developers and land speculators.

 

June 4, 2017

Friday’s blog post addressed Fulton County’s huge hike in property taxes for many Milton residents.  Fulton County’s government is receiving a tremendous blowback from Milton and other North Fulton residents.  Town hall meetings have been scheduled by North Fulton’s two county commissioners, Liz Hausmann and Bob Ellis.  Both commissioners seem to be playing catch-up on this issue.  Did they not realize that voters would be upset by tax appraisals that increased by over 50% for many neighborhoods in Milton (and elsewhere in North Fulton)?  Or were they unaware of the assessments, (but should have been)?  These are key questions for the town hall meetings.  And residents will also need to understand what specific actions our commissioners will take to address the spike in taxes.

Hopefully, the commissioners are going to 1) acknowledge that there are obviously problems in Fulton’s tax assessment office and 2) seek an independent investigation into the situation.  And it would seem that the county should revert to 2016 assessments pending the outcome of such an investigation.  Rather than citizens filing hundreds (and perhaps thousands) of appeals that will clog up the Fulton County Assessor’s office, Fulton County needs to address this issue from the top down.  If the commissioners do not have good answers and specific solutions, these town hall meetings are going to be quite unpleasant for all concerned.  Defending the indefensible would be a bad strategy for Ms. Hausmann and Mr. Ellis.  Rather, they need to step up, advocate for their constituents, and get to the bottom of this debacle.

June 2, 2017

Many supporters have contacted us about huge hikes in appraised values for many properties in Milton.  So today (and perhaps for several days), we are going off-topic.  Following are our quick impressions.

On Wednesday, Fulton County tax assessments were received in the mailboxes of Milton residents.  Many of these assessments were shockingly high.  In one Milton neighborhood, the mean and median appraised values increased by 56% and 56%, respectively.  It seems that the appraisals of unbuilt lots increased even more (than parcels with houses) . . . all the 2017 appraisals we’ve seen were more than 100% higher than 2016 appraisals.

Something has clearly gone haywire in the Fulton County Tax Assessor’s office.

Such steep increases in appraisals are inherently unfair and disrespectful to citizens.  There are two main issues.  First, there should be a cap (8%?  10%?) on how much appraisals can increase year over year. 

Second, many of the 2017 appraisals clearly bear no resemblance to reality.  In many neighborhoods, there are recent homes sales that provide comparisons for establishing appraised values.  For example, in one neighborhood, two homes with the exact same floor plans and similar lots received radically different appraised values.  The lower-valued home sold less than a year ago and appraised at the purchase price.  The higher-valued home appraised 55% higher than the lower-valued home that was purchased less than one year earlier!  And we are hearing the same story over and over again . . .

And so far, Fulton County’s response can best be described as defensive double-talk.

First, Fulton County asserts that they are playing “catch-up.”  Interpretation:  In past we have been grossly incompetent, but now—trust us—we have gotten it right.  As readers might know, for years, the Fulton County Tax Assessors’s office has been a poster child for incompetence.  So now, they want us to believe that their most current assessments are correct.  Doubtful.

Second, Fulton County asserts that average appraised values only increased 13%, as if this is supposed to make us feel better in Milton.  However, unless you are math-challenged, you realize that a 13% average means that certain areas of North Fulton (e.g., Milton) are bearing the brunt of the tax increase.  To bring the average up to 13% means you have some real huge increases to certain taxpayers . . . those of us in Milton.

Of course, Milton citizens have the right to appeal their tax assessments.  However, we predict that the appeals process will be a nightmare for citizens.  Given the blowback that is occurring, we anticipate a flood of appeals to the Fulton County Tax Assessor’s Office.  This means months and months of backlog, with the typical problems we find with the Tax Assessor’s office:  long call times, surly and incompetent claims processing representatives, lost documents, etc.  To fix this government-created fiasco, individual citizens will spend a lot of time and money and experience a lot of frustration.  You heard it here first!

Rather than (time/money intensive, frustrating) bottoms-up appeals by individual citizens, Fulton County needs to find a top-down solution.  Fulton County needs to admit to its unfairness and incompetence in this matter.  Elected officials, in particular, need to step up and address this issue for their constituents.  Specifically, we call for the following:

1. An admission by Fulton County that there may be serious problems plaguing our tax assessment process.
2. A freeze on all assessments until a thorough investigation of the assessment process is completed. This means that 2016 assessments would remain in effect pending the outcome of an investigation.
3. A report showing average appraisal increases by area, down to the subdivision. This will substantiate our claims that certain areas have been unfairly targeted for tax increases.
4. Increased visibility into the algorithm used to assess property values. Citizens have a right to know “how the sausage gets made.”
5. A full investigation of the tax assessment process by an independent third party.
6. Calculation and dissemination of new assessments based on the recommendations from a third-party investigator.
7. Reforms to the assessment process to make it fair to citizens. For example, we believe that there should be a cap on the rate at which assessments can increase year over year (subject to certain conditions—e.g., no improvements to the home, adjustments in square footage).

What does this mean for Milton?

This money grab by Fulton County will have significant negative consequences for Milton.  It seems that appraisals on raw law were particularly steep.  We looked at 4 random parcels and following are the increases in appraisals:  128%, 134%, 204%, and 222% for an average of 172%.  This means there will be even more pressure (as if there were not enough) on owners of larger tracts of land to sell.  Milton has already lost 75% of its equestrian properties.  If these unjustified tax increases are allowed to stand, we will see an acceleration in already overheated development in Milton.

Of course, the impetus for the creation of the City of Milton was more local control.  Tax-payers wanted a government that better reflected their values and desires.  We wanted more of our tax dollars coming back to Milton for parks, police and fire protection, roads, etc.  However, with the latest property tax assessments, we are seeing that local control has some fairly strict limits.  Milton’s citizens need for the city, particularly elected officials, to step up and strongly challenge this patently unjustified jump in property taxes.

(We will likely publish a few more posts on this topic in the coming days.)