Update: Mayor Tomlinson clarifies proposal to thaw property tax freeze

The Muscogee County School Board heard Columbus Mayor Teresa Tomlinson present her case to thaw the property tax freeze last night.

Although she said the school board isn’t required to vote on the proposal, she said the legislative delegation prefers a local consensus from the governing bodies before taking a request to the Georgia General Assembly for it to be on the November 2016 ballot.

Muscogee County voters approved the freeze in 1982, affirmed it again in 1991, and it was upheld by the Georgia Supreme Court. Tomlinson, however, argues that her proposal has never been voted upon.

She proposes allowing homeowners to keep the freeze if they have it. Although they would cycle into the new system when they move from their current property, the homestead exemption would increase from $13,500 to $20,000.

"Citizens under the freeze would not cycle into the new tax system if they

substantially improve their house," Tomlinson wrote in an email Tuesday morning to the Ledger-Enquirer. "They would stay in the freeze and the added value of the addition or improvement would be added to the frozen amount precisely as it is now.

"In short, if you have the freeze you keep it exactly as it is and cannot get out of the freeze unless you transfer the property under the terms of what transfer means now."

Proponents of the freeze say it helps give families and seniors financial assurance so they won’t be taxed out of their homes. But the freeze doesn’t cap the city’s budget, which has grown from $50 million to $265 million during its 33 years, Tomlinson said, and it doesn’t help homeowners in tough economic times because they can’t benefit from downturns in valuations. And perhaps the most vocal argument against the freeze has been from new homeowners complaining they pay substantially more than their neighbors who have similar houses and receive the same city services.

According to a study from Benjamin Blair of the Butler Center for Business and Economic Research at Columbus State University, increasing the homestead exemption under the plan would cost the Columbus Consolidated Government $440,892 the first four years, but it would make up that revenue as the freeze thaws for a net gain of $2.3 million over the first 15 years.

Blair made a similar projection for the school district, which receives 60 percent of the county’s property taxes. The total cost to MCSD for implementing the plan would be $599,746 in the first four years, but the net gain would be $3.1 million over the first 15 years.

Tomlinson said her proposal allows the city and school district to benefit more from the local growth and better enables the governing bodies to keep up with the cost of services.

“We’re the only absolute valuation freeze in the country,” she said. “There are other valuation freezes, but most of them are caps. They allow the community to grow from valuation of homeowners’ property, but we cap it absolutely for an indefinite period of time, until it’s transferred.”

The freeze also “inhibits transparency,” the mayor said, and makes Columbus reliant on sales taxes.

“There’s sort of a fairness and equity issue that people talk about a lot,” she said.

Varner was the only board member to express his opinion about the mayor’s proposal. He called the freeze “an unfair taxation system, and therefore a change, albeit a slow, gradual change, which does protect those who are depending on this freeze at this point in time and gradually gets to a more equal system, I think is healthier for the community.”

Paul Olson was the only resident to speak during the public agenda. He said he’s been in his home for 23 years and pays about $2,000 in property taxes. “I couldn’t care less what the other guy next door to me is paying,” he said.

Varner told the L-E after the meeting that he wants the board to vote this fall on a resolution supporting the mayor's proposal.

This story has been updated to clarify what would happen under the mayor's proposal if homeowners substantially improve their property.

This story was originally published August 18, 2015 at 10:02 AM with the headline "Update: Mayor Tomlinson clarifies proposal to thaw property tax freeze."