The AJC has a story online today highlighting the elmination of annual ad valorem taxes paid on car tags beginning after March of 2013.
Pending Deal’s approval, people buying cars after March 1, 2013, will no longer face paying an annual tax. Instead, vehicle buyers will pay a one-time fee up front, beginning at 6.5 percent in 2013 and topping out at 7 percent in 2015. The fee takes the place of both the sales tax, which is paid at the time of purchase, and the annual ad valorem tax.
The new program will phase in over about 10 years as residents holding on to their cars will continue to pay the old ad valorem tax as long as they keep their current vehicle.
That’s part of the story. The nice part. What is the tricky part is that ad valorem taxes are local taxes. The new sales “fee” is paid to the state. Guess what the state is promising? To return part of those fees to local governments:
For instance, the car tax makes up less than 5 percent of DeKalb County’s $559 million budget, but that county has seen wild dips in property taxes as a result of the recession, while money from car tags keeps coming.
The General Assembly appears to have protected those local budgets.
Clint Mueller, lobbyist for the Association of County Commissioners of Georgia, said the deal struck in the tax bill will deliver “roughly the same amount of revenue” to local governments.
Even so, the change is difficult for local officials conditioned by years of difficult budgets, he said.
“They are extremely risk-averse, and there is some risk in this, so that’s what I’m hearing from our members,” he said.
“Some [counties] could come out better and some could come out worse.”
And county goverments have been set up once again. Any local government official that believes a state will “guarantee” fee income will return to their budget first needs an electric shock, then needs to read this as remedial reading.
Always remember: The state has been screwing local governments out of guaranteed fee income for at least twenty years, and the leaders in charge keep getting re-elected.