Monday, June 23, 2008

City of Buckhead saves 11% taxes, not 50%

By some happy circumstance, a friend of mine was accidentally mailed one of the Fulton County Taxpayers Foundation's letters. The letter includes this graph showing how taxes would decrease under the proposed City of Buckhead (click for larger size):

I would like to call attention to some trickeration in how this material is presented. The proposed city shows a millage rate of just 15.221 mills, compared with a 42.145 mills for the city of Atlanta. They achieve this low rate by ignoring the tax currently paid for Atlanta Public Schools. (The City of Atlanta actually only has a tax rate of 9.35 mills for 2008, but you wouldn't know it from this mailer.)

Using these rates is certainly fair considering that their proposal includes the elimination of public schools from Buckhead. But I would just point out that the stated reasons for secession are centered around the city government, namely the Mayor, the City Council, and the recent issues concerning the city's budget. The Mayor and the Council have no control over the taxes paid to the schools - that is controlled by the School Board.

Eliminating public schools is an entirely different matter from seceding from the City, and it clouds the basic argument concerning city services. When you consider the fact that every other new city on the list above has continued to pay for public schools, and it is clear that we do not have an apples-to-apples comparison. A much fairer comparison would be to look at the taxes saved just from seceding from the city to establish a new city with a lower municipal tax rate.

Such a comparison would look something like this:

Millage Rate

Proposed Apples-to-Apples Current rate
City millage 4.69 4.69 9.35
School millage 0 21.64 21.64
County millage 10.281 10.281 10.281
State millage 0.25 0.25 0.25

Total millage 15.221 36.861 41.521

On the far right is the current tax rate, using the actual taxes proposed for 2008 for the City, School, and County. On the far left is the rate for the City of Buckhead. In the middle is the tax rate for the City of Buckhead using existing school rates and the new municipal rate from the FCTF. As you can see, it is pretty much in line with the other "new cities", and is even higher than Sandy Springs.

Using these numbers, the actual overall tax reduction for the new city is only 11.2%, or 4.66 mills. This is a far cry from the 50% reduction in taxes shouted by the FCTF.

In fairness, the FCTF rates are accurate if you assume that you both secede from the city and eliminate public schools, and a 4.69 millage rate is indeed 50% less than the current city millage rate of 9.35 mills. I am not accusing the FCTF of lying or of erroneous math. I just think they are not presenting an accurate comparison.

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