Senior School Tax Exemption A Look From All Sides


In 2008, Gilmer County voters approved a senior school tax 100% exemption for citizens over age 65. The statute exempts anyone over the age of 65 for the parcel of land they reside on, their home, and ALL improvements. There are no other restrictions. I’m writing this to examine and expose the ramifications and start a discussion on the topic. Some people say I favor repealing the exemption but there is absolutely no truth to that at all. I honestly feel that seniors deserve a break, many are struggling and on a fixed income and deserve our protection.

The way the statute is crafted is the problem. There are no limitations in it. Would it surprise you to know that in Gilmer County we now have commercial properties ( i.e. convenience stores, etc) that are school tax exempt? If a senior lives on the parcel and has rental property on it it is completely school tax exempt. We have seen people that live next to their parents transfer their homes to the folks who combine the parcels and under the law they are now school tax exempt even though they are under 65 and may well have children in school. There is no “cap” on the value of property so someone with a million dollar home pays no school tax. We have recently had a mobile home park combined into one 26 acre tract and is now completely school tax exempt although there very well may be children living there and the owners are making money on it. Basically, the loop hole is big enough to drive a dump truck through and people are doing just that.

So how does that affect everyone else? When exemptions are created there are NEVER corresponding budget cuts so the tax burden is shifted to the balance of the taxpayers. In other words, as one group’s taxes go down, everyone else’s go up. To put this in perspective, I currently pay property taxes at a rate 10 times higher than a friend of mine who has 54 acres in conservation and is over 65. So do many of you. This was sold to Gilmer voters with one argument being that it would attract growth. I was told that we would see a tremendous influx of seniors moving here because of the exemption but it hasn’t worked. Fannin County has a very limited exemption( I will detail later) and they consistently grow faster than we do.

I think it is important to take a look at what this means for us in the future. According to the US Census in 2010 17.8% of Gilmer County citizens were over age 65. By 2015 that will grow to 25% since we are an aging population just like the rest of the nation. By 2025, including the “cheaters” about 40% of the County will be school tax exempt. That means the remaining 60% will be footing the bills. If Gilmer County school tax is 30%-40% higher for business and industry compared to surrounding Counties, how many will come here and how many badly needed jobs will be created? How many families will relocate here to buy up the glut of foreclosed homes or subdivision lots we have on the market if they are under 65 and facing a higher tax burden than if they went elsewhere? How many people will move to other Counties with a smaller tax burden?

Before I offer alternative solutions, let’s examine how surrounding Counties handle it. Fannin County offers a $30,000 exemption at age 62. That’s it. Pickens County offers a 100% school tax exemption at age 62 for those with a combined gross income under $25,000. If their income is more than that they pay school tax. Cherokee County offers a 100% school tax exemption at age 62 up to a maximum value of $371,375 on one dwelling only. None of our neighbors offer one has “open ended” as ours.

So should we just throw it out? I don’t think so. As I said earlier, many seniors have earned and deserve a break, regardless of what surrounding Counties do. But if we leave it the way it is and allow people that aren’t eligible to take advantage of it, combined with our massive County debt it is a recipe for bankruptcy. While the school tax has no direct bearing on County government finances and debt, it can have a direct negative impact on growth that will affect County finances and our ability to make the debt payments.

One way to address it would be to “cap” it at a maximum of $250,000. This would leave intact a 100% exemption for seniors whose properties are valued at less $250,000 and that is about 90% of them. Those whose properties are valued at more than that would only pay school tax on the amount of value over $250,000. ( Ex. A person with a $300,000 house would pay school tax on $50,000). Commercial property should not be eligible for a school tax exemption at all, nor should rental property.

Another way could be to limit it to one dwelling and maybe 10 acres, maybe more, maybe less. This would pull part of the residences that are lived in by those under 65 back in the pool with the rest of us.

I am not sure I am comfortable with Pickens County approach based on age and income simply because I don’t think the County should be checking folks’ tax returns, but it is an option.

A friend of mine that is over 65 thinks it should be based on a consumption tax, in other words, only those that use the service should pay for it. Gilmer County spends about $7900 per student and I really don’t know any parents that could afford that. That would end the school system and the State would probably come in and fix it for us. I doubt if anyone would be happy with the outcome.

Another suggestion is simply stop people from transferring and combining parcels. I have no idea how that can be done. How can you stop people from buying, selling, or giving their land away?

The last solution I can think of is to do nothing which has been strongly suggested to me, but for the reasons I pointed out earlier, I think it would be disastrous for Gilmer County down the road. And so far, the few that have told me they oppose modifying or limiting the exemption have only given reasons that benefit them personally at a cost to the whole community. You can be sure I am “taking fire” just for bringing this subject up, but I am doing so out of concern for the County as a whole. The solution that would benefit me the most would be a total repeal but that would be unfair to so many others. Many seniors, I feel, have earned and deserve an exemption of some type, but how do you stop the abuse with the statute on the books?

I am not commenting on the School System and how it operates, only on how we pay for it. We can keep shrinking the pool of taxpayers footing the bill, but how long will it take before they can no longer carry the burden? In this economy I don’t think it will take very long. Then what happens? I have asked a lot of questions in this article, but I will leave it up to the community to answer them.

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