CONYERS — It may be time to reevaluate Rockdale County’s 100 percent Homestead Option Sales Tax exemption, Post 2 Commissioner JaNice Van Ness said at the Board of Commissioner’s work session last week.
In comments at the close of the Aug. 6 meeting, Van Ness said that the 100 percent HOST exemption for owner-occupied residences leaves some homeowners with a relatively small county tax bill. She said some residents in the Hidden Acres subdivision had complained that their county tax bills were sometimes less than $20 and they felt they should do more to support the county government. “They want to be contributors in the community,” she said.
Van Ness said she felt some consideration should be given to reducing the exemption and more evenly sharing the tax burden between residential and commercial properties.
“I really have concerns that this needs to be moved back to 65 percent … to offset and help the businesses in our community,” she said.
Van Ness said she’s also concerned that not all homeowners who qualify for the exemption understand the benefits and are taking advantage of the HOST.
“This is just a thought as we move forward that there may be a different plan of action,” Van Ness said. “I know we are the only county in the state of Georgia who has the full reduction for HOST … it may be time that we reevaluate that … “
DeKalb County is the only other county in the state that offers a HOST exemption.
Post 1 Commissioner Oz Nesbitt agreed that there may be residents in Rockdale who don’t understand the HOST exemption. He suggested the county sponsor a panel discussion on HOST involving the tax commissioner and chief tax appraiser that could be aired on government access Channel 23.
“I think we need to put that action into play so we can inform our constituents,” Nesbitt said.
A HOST is a 1 percent sales and use tax that by law must devote at least 80 percent of proceeds to an increased homestead exemption from county ad valorem taxes. HOST is a dollar-for-dollar exchange, where each dollar of sales tax collected can be used to offset a dollar in ad valorem taxes on primary residences. The remaining 20 percent of HOST collections may be used for capital outlay projects, and excess revenues must be used to adjust the millage rate.
While Rockdale does not have to provide a 100 percent exemption to homeowners, that has been the case for most of the years since the tax first benefitted homeowners in 2004. County officials have worked to keep the exemption for homeowners at 100 percent — sometimes leaving capital projects unfunded in order to do so.
In 2009, with residential property values up and sales tax collections lagging, county officials were unable to give homeowners the full 100 percent exemption. Instead, the HOST was set at 80 percent. As the recession continued, the exemption remained lower — 75 percent in 2010 and 82 percent in 2011. The HOST exemption was increased to 98 percent in 2012, due in part to a year-over-year 11 percent increase in sale tax collections. A corresponding decrease in the number of homeowners qualifying for the HOST exemption also meant that the sales taxes collected would cover more homes. The exemption has been set at 100 percent for 2013 tax bills.
Recession-curtailed sales tax collections also meant fewer dollars for capital projects. HOST funds have been used for capital projects in just three years in the life of the tax. In 2004 and 2005, 20 percent of HOST collections were used for capital projects. In 2006, the percentage dropped to 16, and in all subsequent years no HOST funds have been spent on capital projects, according to the county’s Finance Department.
Over the years the county has also experienced a shift in the balance between residential, commercial and industrial property values, which meant that more sales tax collections were needed to cover the HOST exemption. In 2002, residential properties accounted for 50.6 percent of the county’s tax digest, commercial was 20.3 percent and industrial was 14.7 percent. By 2007, the balance had shifted to where residential properties accounted for more than 60 percent of the digest.
The HOST was approved by Rockdale voters in March 2001. Seventy percent of the 4,000 voters who went to the polls voted in favor of it.