Motion to Reduce City Property Taxes is Defeated
The 2018 property tax millage rate for Johns Creek has been finalized at 0.003842 after debate and a vote by City Council on Monday August 13, 2018. The rate is lower than the originally advertised "rollback" rate of 0.003870. That advertised rate, while considered a "rollback" under state guidelines, would actually result in a slightly higher tax burden on existing property owners that had seen their 2018 assessments increase at the same average as the aggregate increase for the city. The approved millage rate is intended hold the tax burden consistent with 2017 for existing properties. Note that individual properties will realize a different tax burden impact depending upon how their reassessment compared relative to the overall average increase for existing properties in Johns Creek. The city can also anticipate an increase in overall tax revenue due to year-over-year "growth".
Councilwoman Stephanie Endres provided a detailed analysis of the city's millage rate options, budget, and relationship to tax revenue requirements. Based on that analysis, a motion was presented by Councilman Coughlin to reduce the millage rate to offset the effects of "growth" in the tax digest. The tax digest includes $135,070,400 in "new development", but the analysis shows that 76% of that total was due to reassessments on existing high density housing, two existing major shopping centers, and residential changes, and do not represent new development that would require additional city services above what is already provided.
In addition to those findings, Endres' analysis notes that the city not only meets a recommended cash balance adequate to meet three months of city expenditures, but that we have also built additional cash balances of $34MM that is available to city council. On top of that, there is $2.8MM of budget expenditure dollars unappropriated available for other spending needs. During the millage rate discussion, Assistant City Manager Kimberly Greer confirmed that sales tax revenue collections in the city are on-track to exceed plan by approximately $1MM. The conclusion is that Johns Creek's financial position is very strong, and it is based upon this conclusion that Councilman Coughlin offered his motion (seconded by Councilwoman Endres) to reduce the millage rate and allow city property owners to keep some more of their hard-earned money. After much discussion, a vote on the motion was held, with Councilmembers Coughlin, Endres, and Bradberry joining in support of the financially conservative proposal. Those three votes were opposed by Mayor Bodker, and Councilmen Broadbent, Lin, and Zaprowski, and the motion to reduce Johns Creek property taxes was defeated.
The opposition to reducing city property taxes was based primarily on assertions that there are upcoming obligations identified in the 2019 budget proposal that was reviewed earlier in the evening meeting. Those potential obligations include a focus on storm water management, a new fire station in the northwest corner of the city, and sound abatement projects associated with road projects. Those items are proposals in a 2019 budget, while 2018 property taxes are allocated to fund 2018 priorities and budgets. Even if it was appropriate to consider 2019 expenses against 2018 taxes, analysis indicates that the city has more than enough in reserves to cover those costs, and would likely still continue to build additional cash. In the end, Mayor Bodker, and Councilmen Broadbent, Lin, and Zaprowski voted to support building additional cash balances to fund future projects despite an already healthy and growing cash reserves available to the city.
Having defeated the motion to reduce city property taxes, the final approved motion set the 2018 millage rate at 0.003842. Councilman Bradberry suggested a further reduction to 0.0038 to provide at least some tax relief to property owners, but the opposition to pass any tax reduction remained. The debate about allowing property owners to keep more of their money versus using the city's taxing authority to fund operations and build increased cash reserves ended on the same 4-to-3 vote with Mayor Bodker, and Councilmen Broadbent, Lin, and Zaprowski in support, and Councilmembers Bradberry, Coughlin, and Endres in opposition.