DUNWOODY — Residents of Dunwoody could see a property tax rate increase from the city of between $33 to $69 per year on the typical Dunwoody home.
City leaders are considering an increase to the property tax rate, also called the millage rate, which matches the cap instituted by the city’s founders.
“We have been watching closely the relationship between revenue sources and service expectations of residents and businesses,” said Dunwoody City Council Member John Heneghan. “We have found that the revenue sources proposed at the start of incorporation in 2008 do not match the current operational levels. We’re eager to hear the community’s input on funding options.”
The base service level for the city created in 2008 was based on a much lower level than expected today. For example, the parks budget proposed at incorporation would be about $450,000 today if indexed for inflation. Compare that to current operations and programming costs, which run about $3 million. For public safety, the current number of authorized police officers is almost triple what was recommended in 2008.
Dunwoody has never raised the tax rate before. As a result, the city’s income from residential property taxes has remained relatively flat, going from $2.88 million in 2008 to an estimated $2.94 million today.
According to city officials, the city has one of the lowest millage rates, 2.740 mills, in the area for cities that levy a tax. In addition, all homestead properties have a 1.000 mill exemption, effectively making the rate 1.740 mills. On top of that, all homestead properties in the area are eligible to have their property assessments frozen from any increase in city taxes.
A typical Dunwoody home assessed today at $500,000 does not pay city taxes on the full amount, which would equal $321. Instead, when the average freeze value is taken into account, that same house is taxed as if it is assessed at $375,000, and the city taxes drop to $234. Raising the millage rate to the cap of 3.040 mills would be an additional $42 a year.
City officials are reminding residents that the freeze does not include school taxes.
The city council passed the 2022 Budget with a known structural deficit in the general fund. Starting with the onset of COVID, the city dropped revenue and proposed using fund balance to maintain operations. But in neither year (2020 nor 2021) did the city use any fund balance, so it grew.
City staff has recommended advertising the millage rate for 2022 at 3.040. As required by state law, the city will host three public hearings on the tax rate at Dunwoody City Hall on the dates listed below.
• Friday, June 17 at 8 a.m.
• Monday, July 11 at 8 a.m.
• Monday, July 11 at 6 p.m.
The final public hearing will be followed by a vote by council
Raising the millage rate to 3.040 would generate about $1 million of new revenue. Staff recommends that $250,000 of this increase be earmarked for pay adjustments for staff, including police, in the third or fourth quarters to continue being competitive with neighboring jurisdictions.
The rest of the increase is recommended to be used to shore up the structural deficit. All combined, these actions should reduce the structural deficit to approximately $1 million. If approved this increase would appear on the tax bills sent out this fall.
The city’s tax share of most tax bills represents only 5% of the overall total bill.
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