Letter to the Editor: Let’s Talk Taxes

As we head into local election campaigning, we see the classic tug of war between the “cut taxes” candidates and “provide civic services” candidates laying out their values and how they’ll deliver on campaign promises. There are several things that need clarification to have a reasonable discussion.

First, it seems ridiculous to state, but not all taxes are created equal. For families that are still working, in general, the largest taxes by far will be federal income tax and payroll taxes, followed by state income taxes, then property taxes, and finally sales taxes. For retirees who’ve done some tax planning, property taxes will be a larger portion of their tax pie, and income taxes will still be significant, unless you live only on Social Security, but then you’ve got bigger problems than taxes. As we go down the list of tax burdens all of us have, it is ironic we pay the least for the services that benefit us most directly, local public safety, public works, and recreation.

Many Peachtree City residents don’t know that only about 20% of their annual property tax bill goes to Peachtree City. The bulk of the bill goes to the Fayette County Board of Education (66%) with some going to Fayette County (12.7%) and a sliver for 911 service (0.7%). This is important because people who have an average property tax bill ($6,014) will spend much more than the $1,218 portion that goes to Peachtree City on things like mobile phone service, household utilities such as gas and electricity, homeowner’s insurance (this is where costs are really skyrocketing), and automobile insurance (ditto on skyrocketing costs). The reason I suspect this is because most people hire professional tax preparers and simply take a file of mostly unread documents, except for the “Total Due” lines, to them.

Third, the City is very transparent with the City budget. The City Manager gave a FY2026 Proposed Budget prestation dense with fact and figures in June that was 43 slides. The detailed budget book is 78 pages including the headcount plan, projected five-year finances, detailed income and expenses, capital expenditures, and departmental budgets; just about anything you want to find out is in it. On July 10 there was a public budget hearing, and it was so important to the “cut taxes” candidates that none of them showed up to speak out against. I know this because I attended the meeting to speak “generally in favor” (I don’t like defined benefit plans) as did one other individual. Councilman Holland spoke in favor of the budget, and I believe he’s earned his conservative street cred.

Fourth, people start using words like “skyrocketing” or “dramatically” to describe their property tax bill. On this point, I’d like to lay out a challenge: let’s meet for coffee and you can bring your property tax bills for the past few years and you can show me because, frankly, I don’t believe you. I track my expenses, and if you want to talk about skyrocketing, I’ll show you my homeowners and automobile insurance premiums. Or we can talk about the post-pandemic inflation that hit 12%.

Fifth, many residents focus on the millage rate, but what you pay in property taxes is really determined by more than just the millage rate. In an environment of rising home values, you’ll pay more property taxes even if the millage rate stays the same or goes down because the assessed value of the home increases. What’s ironic about this is homeowners love that their homes appreciate when applying for a HELOC or selling but don’t appreciate it when tax time comes! And appreciation doesn’t happen in a vacuum; a community must have good public safety, public amenities, schools, and a good location for homes to be more desirable and appreciate. Municipal government controls two of these things. The good thing is HB 581 now caps annual property tax increases for homesteads to the rate of inflation as measured by CPI. As of March, 2024, CPI was 2.9%. During periods of economic uncertainty (2021), appraised values tend to go down and so do taxes.

I’d like to get into realistically how much property taxes could be cut. Before some very small recent changes, the proposed FY2026 revenue was $58.4-million with $48.1-million coming from taxes, the difference between the two is permits, charges, fines, and similar things. Of the $48.1-million in taxes, $24.2-million is current year property tax (50%) with Local Option Sales Taxes at $12.9-million (27%) and all other taxes such as franchise taxes, alcoholic beverage taxes, other ad valorem taxes, and similar taxes coming to roughly $11.0-million (23%). Total City spending is $58.4-million with the top category of Public Safety, namely police and fire, coming in at $27.2-million (47%), public works (13%), and recreation and special events (10%) rounding out the top three and totaling 70%. It has been said that the largest source of revenue, property taxes, essentially covers the largest expense, public safety, and any serious consideration of budget reduction to reduce taxes would have to include a reduction in public safety. Public safety is one of those things that you hope you never need, but you’re glad when the police or fire department show up.

The average annual property tax bill in Peachtree City is projected at $1,218 per the City’s budget presentation. I’m not sure what a meaningful reduction is, but let’s say 50% or $609, which averages out to $51 per month, which is enough for a family of four to go to McDonald’s monthly and have some left over or a trip to a quick casual restaurant and have to take extra. A 50% reduction in property taxes to offset this is $12.1-million, about 21% of the total City budget, and roughly the total budget of Public Works and Recreation, but I’m willing to forgo fixing City infrastructure, Kedron Pool, Glenloch, and Fourth of July activities if it means an extra Big Mac per month.

On the other hand, to hit the $12.1-million we could start at the bottom and work up: first, let’s eliminate the City manager’s office ($870-thousand), and add to that Finance ($1.2-million), Information Technology ($2.4-million), and Human Resources ($990-thousand) for a total of $5.5-million, almost halfway to my monthly Big Mac. I’m not sure how the city would be managed, the books kept, communications would happen, or folks would be hired and fired, but we need to cut taxes. Next, Building Maintenance at $1.5-million and Grounds at $2.1-million. Nobody will mind if the roofs leak and the grass is overgrown: Golden Arches on the way. This next one is easy- we don’t need the City Clerk’s office- another $500-thousand, down. I’m not sure who will take minutes during Council meetings or make sure procedures are followed; we’ll just give the job to whomever is left. I’m only at $9.6-million, but I’m sure we can find another $2.5-million somewhere. The point is even a $609 reduction to the average bill would be catastrophic for services all of us depend on- even if we don’t realize we benefit from them.

What’s interesting is that $609 is just about 10% of the average Peachtree City homestead’s total property tax bill of $6,014, and relative to other household expenses would likely be largely unnoticeable. In the interest of transparency, a more modest reduction has already been approved. The FY2026 budget was passed at a recent City Council meeting with a reduction of $504,105 or about 2% of the total budget. A 2% reduction to the average annual Peachtree City homestead tax bill is about $25.40. Everybody wins: we get a tax cut, and we get to keep our services.

Thanks

Paul Schultz

Peachtree City