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Rep. Mike Jacobs addresses the details of Brookhaven

Jacobs answers question about taxes and services for proposed city

Editor's note: Below, Rep. Mike Jacobs answers some common questions about the proposed city of Brookhaven in a recent posting on his website. Jacobs addresses how the new city could affect the county's tax structure and what services the city can provide.

The cityhood bill was passed by the General Assembly on March 29. The bill now awaits the Governor’s signature. If approved it would be sent to voters in Brookhaven on whether to incorporate. Click here to read the final version of the cityhood bill, HB 636.

Q: How will cityhood affect my property taxes?

A: It will reduce your overall property tax burden as compared to what is paid in unincorporated DeKalb County.

Becoming a city does not add new taxes to your property tax bill. Instead, it shifts two line items – one known as the Unincorporated Tax District (labeled “UNIC TAXDIST”) and one for Police Services (labeled “POLICE SERVC”) – from the county to the city.

DeKalb County increased these two line items 82% in 2011, from 3.5 to 6.39 mills in total.

A positive vote in the July referendum would decrease these line items from 6.39 mills to a maximum of 3.35 mills, where they will be subject to a millage cap (more on that in a moment). It also would increase the applicable homestead exemption from $10,000 to $20,000. The HOST credit that you see on your tax bill does not apply to city taxes. It only applies to county taxes, so it needs to be added back into your property taxes in order to arrive at the final amount you would pay.

The result is that all property owners will receive a property tax cut. For homestead property (your primary home), this tax cut could be slight or it could be significant, depending upon how efficiently the city council operates the city.

Dunwoody now enjoys the lowest property tax burden anywhere in DeKalb County, lower than the unincorporated area. It is anticipated that Brookhaven would enjoy the second lowest property tax burden in DeKalb, also lower than the unincorporated area.

Click here for an analysis that I previously prepared to show how this tax cut would operate in real dollars.

Q: I am a senior citizen. How does cityhood affect my senior homestead exemptions?

A: It has no impact on your senior homestead exemptions, which will remain the same. All senior homestead exemptions that currently apply to your county property taxes will apply to the transferred city line item.

Q: Are there any new taxes in a city?

A: Yes. The only new taxes are franchise fees. These are amounts that the city charges utility providers for running their utility lines in the right-of-way along city streets. Not all franchise fees are passed directly to utility customers who live in the city that charges the fees, but some are.

Specifically, franchise fees will add 2% to your electric bill and 3% to your land-line telephone bill. Nothing is added to your natural gas or cable bill. If you do not use a land-line telephone, but instead use voice-over internet (VOIP) or a cell phone, nothing is added to those bills, either.

Click here to read a more thorough explanation of franchise fees that was prepared by the Carl Vinson Institute of Government (CVI) at the University of Georgia.

Q: Is the City of Brookhaven financially viable?

A: Yes. The CVI study that was performed for the proposed city estimated that city expenditures would be $25.1 million, and that city revenues would exceed this amount by approximately $135,348. This estimate is believed to be conservative, for two reasons.

First, DeKalb County has stated in two recent news articles (click here and here to read) that the county believes that $25 to $27 million in tax revenue will be shifted from the county to the city. The CVI revenue estimate is on the low side of this range.

Second, the City of Dunwoody is only spending $20.9 million in 2012, $4.2 million less than the CVI expenditure estimate for Brookhaven. In this regard, Dunwoody is a good analogue for Brookhaven. The two cities would be located in the same county, operate in a similar manner with privatized services to the extent it is cost-effective, and have a similar population size, with Dunwoody at 46,267 and Brookhaven at 49,173.

The $135,348 is not an actual budget surplus. It is an estimate based upon a study. Before Dunwoody was formed, CVI estimated its surplus to be $278,789. However, in its first year of operations, Dunwoody’s actual expenditures were 11% less than estimated.

Click here to read the complete CVI study with the two addenda that were prepared during the 2012 legislative session. The addenda are found at the end of the document.

Q: Opponents say that the “millage cap” will hurt the city. Is this true?

A: No. The millage cap simply means that your millage rate for city property taxes will not go higher than 3.35 mills without asking for your vote in a public referendum.

Opponents of cityhood point to the City of Johns Creek, which has a millage cap that has prevented it from pursuing infrastructure improvements at a desirable pace, and then argue that “Brookhaven also will have a millage cap” that will yield the same result with respect to Brookhaven’s infrastructure.

What the opponents are not telling the public is that, in order to be increased, the Johns Creek millage cap requires a “yes” vote from a majority of all registered voters who live in the city. This is virtually impossible to accomplish in any given election.

By contrast, in order to increase the Brookhaven millage cap, the city charter takes the traditional approach of requiring a “yes” vote from a majority of those voters who show up to the polls on election day.

The millage cap ensures a substantially higher degree of transparency than exists in unincorporated DeKalb. It requires your city council to first explain to you why they are requesting a property tax increase above a certain rate, and then ask your permission for the proposed tax increase.

Q: How does the millage cap affect bonds?

A: General obligation bonds (GO bonds) already require a public referendum. Therefore, the city charter provides that GO bonds will not count toward the millage cap.

Also, the City of Brookhaven will be able to opt out of future county bond issues.

Q: What are the main services that the city would provide?

A: Police. Parks and recreation. Code enforcement. Roads, sidewalks, and drainage. Planning, zoning, and land use.

Cityhood does not add a layer of government with respect to these services. Instead, the services and the tax revenues that go along with them are transferred from the county to the city. The county ceases to be responsible for providing these services to the citizens who live in the city.

Fire, EMS, sanitation, water, sewer, the jail, and most courts (except for the municipal court) will remain administered by the county government.

Public schools will continue to be administered by the DeKalb County School System.

Q: Who will be making the decisions about my city services and taxes?

A: An elected city council comprised of residents of our community. The city would have a five-member city council with four members elected from single-member districts and a mayor elected at large. These councilmembers will be highly accountable to our neighborhoods due the relatively small population size of each city council district.

Each Brookhaven city council member would represent about 12,297 residents compared to the five DeKalb County commissioners who represent about 138,379 residents each, and the two super district commissioners who represent about 345,947 residents each. That’s 11 times and 28 times, respectively, as many residents as a Brookhaven city council member would represent.

Click here to view a map of the proposed city council districts.

District 1 includes the Murphey Candler and Silver Lake neighborhoods. District 2 includes Ashford Park and Drew Valley. District 3 includes Historic Brookhaven, Brookhaven Heights, Brookhaven Fields, and Lenox Park. District 4 includes HillsDale, Pine Hills, and a portion of Buford Highway.

Compare these neighborhood-focused city council districts to the DeKalb County Commission, where our three commissioners reside in Downtown Decatur, Druid Hills, and Stone Mountain.

Q: Will I have to change my address from “Atlanta” to “Brookhaven”?

No. You can use whichever address you prefer. As long as the zip code is correct, the postal service will not mind.

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