C enter for E conomic A nalysis
Macon State College – School of Business
Economic Analysis of Property Values and Tax Incidence in the College Hill Corridor in Macon, Georgia Conducted by: Dr. Trip Shinn, Associate Director Center for Economic Analysis School of Business Macon State College Dr. Greg George, Director Center for Economic Analysis School of Business Macon State College August 15, 2012 The purpose of this report is to present an independent and unbiased assessment of changes in property values and tax assessments in the College Hill Corridor in Macon, Georgia, relative to similar changes in Bibb County and the City of Macon. The Center for Economic Analysis is housed in the School of Business at Macon State College. The mission of the Center is to provide Middle Georgia with a variety of analytical services to local businesses, non-profits, and governmental agencies. The Center strives to be a center of excellence and is the leading provider of economic, market and business research in the Middle Georgia region. We are pleased to present the current study to interested parties and confident it will serve as a valuable tool for making informed decisions. This report does not necessarily reflect the opinion of the School of Business, Macon State College, or the University System of Georgia. Any errors or omissions are the strict responsibility of the authors. Additionally, any errors or questions should be addressed to either Trip Shinn at trip.shinn@maconstate.edu or Greg George at greg.george@maconstate.edu. This project is made possible through a generous grant from the Knight Neighborhood Challenge through the Community Foundation of Central Georgia. Without that funding, this work would never have been possible, and we especially want to thank Beverly Blake, Kathryn Dennis, and Julia Wood for their advice and support. Several longsuffering Mercer Law School students spent nearly a year gathering residential tax and property data for the entire College Hill Area. These students include Leah Morton Aiken, Paul Chichester, Lauren Schultz, Melinda K. Banks, Jenny Carter Nolan, Ashley Tanner and Megan Tuttle. George Greer of Spivey, Pope, Green & Greer offered them invaluable instruction. We would like to especially thank John Buckner, also a Mercer Law School student, for his leadership role in the project and his consistent dedication to the data and what we would learn from it.
Economic Analysis of Property Values and Tax Incidence in the College Hill Corridor in Macon, Georgia The College Hill Corridor encompasses an area bounded by Riverside Drive on the north, New Street and First Street on the east, Interstate 75 on the west, and Mercer University Drive and Little Richard Penniman Boulevard on the south. The present study analyzes property assessment values and tax characteristics of 1,554 residential properties in this area.
DESCRIPTION OF PROPERTY DATA SET
A data set of 1,990 non-commercial properties containing both property assessment values and tax data for the years 2002 and 2011 gathered from the Bibb County tax digest was submitted to the Center for Economic Analysis for analysis. 436 entries were deleted for the following reasons: (1) The property is owned by a nonprofit entity (e.g., a church) and thus not subject to taxation (295 properties); (2) Some property addresses have missing data (30 properties) (3) Data must be available from at least 2004 to be counted in the 2002 analysis (this eliminated 53 properties with property value or tax information no earlier than 2005) (4) Data must be available up to at least 2009 to be counted in the 2011 analysis (this eliminated 58 properties with property value or tax information available no later than 2008) Section (3) above means that if the earliest data available for a property is 2003 or 2004, it would still be included in the analysis. Section (4) above means that if the latest data available for a property is 2009 or 2010, it would similarly still be included in the analysis. The point of the procedure is to include properties with information in, for example, 2003 or 2004 (instead of 2002) and 2011; and properties with information in, for example, 2002 and 2009 or 2010 (instead of 2011). A small handful of observations meet these criteria. The resulting data set contains 1,554 observations. The following data items were included, for both 2002 (or 2003 or 2004) and 2011 (or 2009 or 2010): (1) (2) (3) (4)
Assessed value of the property Millage rates Taxes collected for the county, the school system, and the city Total taxes collected
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After the observations not subject to taxation or with missing data were deleted from the original data set, summary statistics were compiled to see the effect of these deletions on the total assessed property values and taxes, as shown in Table 1 below. The indicated differences between the two data sets do not appreciably affect the subsequent comparison of 2011 data to 2002 data.
TABLE 1 COMPARISON OF ORIGINAL DATA SET WITH ADJUSTED DATA SET Original Data Set ASSESSED VALUE 2002 $ 145,663,767 CO. TAX 2002 $ 633,930 CITY TAX 2002 $ 432,203 SCH. TAX 2002 $ 831,392 TOTAL TAX 2002 $ 1,907,971 ASSESSED VALUE 2011 $ 185,465,057 CO. TAX 2011 $ 809,278 CITY TAX 2011 $ 689,303 SCH. TAX 2011 $ 1,202,222 TOTAL TAX 2011 $ 2,827,115
Adjusted Data Set $ 128,241,236 $ 556,778 $ 377,716 $ 723,557 $ 1,667,928 $ 171,810,530 $ 747,004 $ 637,463 $ 1,109,661 $ 2,619,139
PROPERTY ASSESSMENT COMPARISONS : BIBB COUNTY, CITY OF MACON, COLLEGE HILL
An examination of property value assessments in 2002 and 2011 reveals a number of differences between Bibb County, City of Macon, and College Hill Corridor valuations. The College Hill Corridor assessed property values were totaled and compared to the total assessed property values for Bibb County and the city of Macon for both years. Table 2 below indicates that Bibb County assessed property values increased 41% from 2002 to 2011, while City of Macon assessed property values increased 21%. Over the same time period, the College Hill assessed property values increased 34%. 1 Thus while assessed property values in the College Hill Corridor were lower than the valuations for Bibb County, Corridor property values outpaced those of the City by 34% to 21%. In reality the difference is even greater, since all the College Hill Corridor properties are contained in the City of Macon.
1
Note that property values for Bibb County and the City of Macon, taken from the Bibb County Tax Assessor’s office, are approximately 40% of estimated market value; College Hill Corridor property value estimates reflect full market value estimations. Period-to-period percentage change comparisons are unaffected by these differences.
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BIBB COUNTY CITY OF MACON COLLEGE HILL CORR.
TABLE 2 PROPERTY VALUE ASSESSMENTS 2002 2011 $ 1,620,758,540 $ 2,281,356,418 $ 746,665,536 $ 905,490,828 $ 128,241,236 $ 171,810,530
% CHANGE 41% 21% 34%
The 1,554 observations in the College Hill Corridor data set were divided into six groups on the basis of 2002 property assessment values, as shown in the leftmost column of Table 3. This facilitates the analysis of the data on the basis of property value level, to see to what extent changes from 2002 to 2011 vary by property assessment.2 As noted above, the assessed value of all residential properties in the College Hill Corridor increased 34% from 2002 to 2011. Although the highest-value assessed properties (the 113 properties with an assessment value of at least $200,000 in 2002) decreased 2% over the time period, the large increase in value of the lower-valued properties more than offset the higher-valued property decrease. For example, the 183 properties valued between $80,000 and $120,000 in 2002 increased 46% on average between 2002 and 2011, from $99,017 to $144,404 (Panel B); the 292 properties valued between $40,000 and $80,000 in 2002 increased similarly (49%), from an average of $58,414 in 2002 to an average of $86,881 in 2011. The most dramatic increase took place for the 793 lowest valued properties (under $40,000 in 2002): on average, these properties increased in assessed value by 180% from 2002 to 2011, from $15,490 to $43,328. This increase appears to have been due mostly to new development taking place in the Corridor.
TABLE 3 PANEL A TOTAL ASSESSED VALUE OF PROPERTIES
PANEL B AVERAGE ASSESSED VALUE
(by 2002 PROPERTY ASSESSMENT LEVEL)
ASSESSMENT LEVELS NUMBER OF (in 2002) PROPERTIES UP TO $40,000 793 $40,000 - $80,000 292 $80,000 - $120,000 183 $120,000 - $160,000 111 $160,000 - $200,000 62 OVER $200,000 113 TOTAL 1554
$ $ $ $ $ $ $
2002 12,283,270 17,056,926 18,120,146 15,221,856 10,923,857 54,635,181 128,241,236
2011 $ 34,358,920 $ 25,369,311 $ 26,426,010 $ 19,343,066 $ 12,739,155 $ 53,574,068 $ 171,810,530
$ $ $ $ $ $ $
2002 15,490 58,414 99,017 137,134 176,191 483,497 82,523
$ $ $ $ $ $ $
2011 % CHANGE 43,328 180% 86,881 49% 144,404 46% 174,262 27% 205,470 17% 474,107 -2% 110,560 34%
2
The figures in the present study are not adjusted for inflation, for two reasons: (1) prices rose only 19.2% from 2002 to 2011 (Bureau of Labor Statistics); and (2) the purpose of the present study is to compare period-to-period nominal changes in assessment value and taxes, since taxing authorities do not calculate real (i.e., inflation adjusted) values when determining tax liabilities.
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PROPERTY VALUATION AND TAX ASSESSMENT: COLLEGE HILL CORRIDOR
Table 4 shows both total tax assessment and average (per property) tax assessment for 2002 and 2011, again by 2002 property assessment level. In keeping with the results reported thus far, the lower the 2002 assessment level, the greater was the percentage increase in taxes assessed in 2011, compared to 2002. All told, tax assessment for properties contained in the data set being analyzed increased 57% from 2002 to 2011. For those properties valued between $80,000 and $120,000, the average tax bill increased 64%, from $1,307 to $2,142. Similarly, the average tax bill for owners of properties valued between $120,000 and $160,000 in 2002 increased 52%, from $1,724 to $2,622. The average tax bill for owners of properties valued under $40,000 and for owners of properties valued between $40,000 and $80,000 increased by 228% and 131%, respectively (Table 4, Panel B). It is no great surprise that as property valuations increased from 2002 to 2011, tax bills for property owners likewise rose.
TABLE 4 PANEL A TOTAL TAXES
PANEL B AVERAGE (per property) TAXES
(by 2002 PROPERTY ASSESSMENT LEVEL)
ASSESSMENT LEVELS NUMBER OF (in 2002) PROPERTIES UP TO $40,000 793 $40,000 - $80,000 292 $80,000 - $120,000 183 $120,000 - $160,000 111 $160,000 - $200,000 62 OVER $200,000 113 TOTAL 1554
2002 $ 153,515 $ 199,290 $ 239,189 $ 191,321 $ 131,725 $ 752,889 $ 1,667,928
2011 $ 502,929 $ 460,772 $ 391,925 $ 290,987 $ 183,541 $ 788,985 $ 2,619,139
$ $ $ $ $ $ $
2002 194 683 1,307 1,724 2,125 6,663 1,073
$ $ $ $ $ $ $
2011 % CHANGE 634 228% 1,578 131% 2,142 64% 2,622 52% 2,960 39% 6,982 5% 1,685 57%
PROPERTY VALUATION AND TAX ASSESSMENT: COLLEGE HILL CORRIDOR AND BIBB COUNTY
Table 5 below incorporates several data items from the tables above, and examines total tax assessments for Bibb County and the College Hill Corridor. A comparison of College Hill property assessment values and tax data from 2002 and 2011 to similar measures for Bibb County and the city of Macon shows significant differences between the two entities. Table 5 provides property assessment values for all of Bibb County and for the College Hill Corridor in the years 2002 and 2011. In addition, the table includes tax assessments for Bibb and College Hill categorized by use: county taxes, school taxes, and city taxes.
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As the data indicates, the assessed value of residential properties in the county increased 41% over the 10-year period, while total tax receipts increased 30%. Although assessed property values for the College Hill Corridor were below those of the county as a whole, as previously noted, the tax figures for the College Hill Corridor are significantly higher. As the data indicates, tax assessments for all three municipal entities – the county, the city, and the schools – increased by a greater percentage for College Hill than for the rest of the county. Overall, total taxes paid increased 57%, compared with an increase of 30% for Bibb County. (Note again that property values for Bibb County, taken from the Bibb County Tax Assessor’s office, are approximately 40% of estimated market value, leaving period to period percentage change comparisons unaffected.)
TABLE 5 PROPERTY VALUATIONS AND TAX ASSESSMENTS BIBB COUNTY COLLEGE HILL CORRIDOR
ASSESSED VALUE
2002 2011 % CHANGE 2002 2011 % CHANGE $ 1,620,758,540 $ 2,281,356,418 41% $ 128,241,236 $ 171,810,530 34%
TAXES:
COUNTY TAXES CITY TAXES SCHOOL TAXES TOTAL TAXES
$ $ $ $
51,056,383 13,680,017 55,501,851 120,238,251
$ $ $ $
59,013,588 19,882,657 77,851,721 156,747,966
16% 45% 40% 30%
$ $ $ $
556,778 377,716 723,557 1,667,928
$ $ $ $
747,004 637,463 1,109,661 2,619,139
It is important to note that the figures in Table 5 for Bibb County include both residential and commercial tax assessments, while those for the College Hill Corridor are residential only. Also, the 2002 Bibb County figures are adjusted for sales tax credits and the Homeowners Tax Relief Grant, which did not apply after 2004. Although these adjustments strictly speaking prevent an apples-to-apples comparison, we are confident the figures presented accurately reflect differences between the totals for the county and the College Hill Corridor.
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34% 69% 53% 57%