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Comparing property taxes
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Last week’s column examined state expenditures over time, and found that, considering inflation and population growth, Georgia state government is not spending any more today to serve its citizens than it did 10 years ago. This week’s column examines local spending and property tax burden. 

Expenditure data
Since 1995, the Department of Community Affairs (DCA) has tracked local government finances for the state through annual surveys of local governments.  According to DCA, approximately 92 percent of local governments in Georgia respond to the survey. Of the 8 percent of governments that do not respond, the majority have jurisdiction over less than 500 citizens. This examination of local government spending is based on the annual financial information as reported by DCA.

Surprising results
Last week’s column explained why it is important to control for inflation and population growth when examining government spending — because the purchasing power of a dollar decreases over time and because it costs more to serve more citizens. When the same controls are applied to local government spending there are some surprising results — local government spending, like state government spending, has remained flat.

• In FY97, local governments spent just under $9.5 billion or $1,231 per citizen.

• In FY99, local governments increased their spending to just over $11.4 billion.  When adjusted for inflation and population growth, local governments spent $1,370 per citizen in 1997 dollars.

• In FY01, local governments spent about $12.2 billion. When adjusted for inflation to 1997 dollars and an additional 360,000 people, local governments spent $1,332 per citizen.

• In FY04, local governments spent $14.4 billion, which amounts to a per capita and inflation adjusted spending level of $1,394 per person. 

• In FY06, local government spending increased to $14.7 billion.  Per capita and inflation adjusted spending that year was $1,266.  This is $55 less per person than local governments spent in FY97.
Another analysis
The National Tax Foundation publishes a yearly “National Business Tax Climate Rankings by State” report and one of the five measurements is property taxes per capita and as a percentage of income. Since property taxes are essentially locally created, assessed and collected, then this is probably one measurement of relative tax burden as it pertains to local governments.

The FY08 Property Tax Index lists Georgia as 33rd but in 2003 Georgia ranked 24th.  The best states in the ranking include New Mexico, which is first, Idaho second, Utah third, Hawaii fourth and California fifth. Other Southeastern states rankings include North Carolina, 34th, Alabama 12th, and Florida at 18th. This index takes into account property taxes per capita and as a percentage of personal income among other measurements, so the state has increased the property tax measurement relative to other states.

As of July 1, 2007, Georgia citizens pay property taxes averaging $948 per capita according to the Foundations figures. The lowest states in property taxes collections per capita include Alabama at $419 per capita, Oklahoma at $518 and West Virginia at $590.  Other southeastern states are North Carolina at $787, Florida at $1,155, South Carolina at $994 and Tennessee at $677. Georgia appears to be higher than most Southeastern states.

Georgia residents pay 2.69 percent of income in property taxes. The best states include Alabama at 1.20 percent, Delaware at 1.36 percent, New Mexico at 1.47 percent, Oklahoma at 1.44 percent and West Virginia at 1.89 percent.  Other Southeastern states include Florida at 2.9 percent, South Carolina at 3.03 percent, Tennessee at 1.88 percent and North Carolina at 2.21 percent. Again, Georgia residents pay more as a percentage of income than most Southeastern states except Florida and South Carolina.

The last property tax calculation featured is the Property tax collections per household. In FY06, Georgians paid $2,662 in property taxes per household and was ranked the 24th highest in the country, but below the national average of $3,134. The lowest states were Arkansas at $682, Alabama at $940 and Kentucky at $1,167. Other Southeastern states include Florida at $3,268, North Carolina at $2,044, South Carolina at $2,413 and Tennessee at $1,752.

So Georgia has slipped in some measurements and appears to be somewhere in the middle to slightly higher ranking in property tax measurements which is some indication of local spending.