Dalton and Whitfield County plan 100% rollback of property tax rates

Aug. 12—Members of the Dalton City Council are scheduled to vote on a Local Option Sales Tax (LOST) agreement when they meet Monday at 6 p.m. in City Hall.

The agreement determines how revenues from that tax are divided among local governments.

The LOST, which had to be initially approved by voters, is a 1% tax on most goods sold in a county that is used by local governments to fund operations. It is different from the Special Purpose Local Option Sales Tax (SPLOST), which can only be used for specific capital projects approved by voters and cannot be used for operations.

Under the tentative agreement, Whitfield County would continue to receive 60.457% of LOST revenues, Dalton 36%, Cohutta .72%, Tunnel Hill .929% and Varnell 1.894%.

According to data provided by Dalton and Whitfield County, in 2021 the LOST brought in $21.4 million.

The county Board of Commissioners approved the agreement on Monday. On Thursday, Dalton City Council members agreed to take the agreement off their Monday agenda unless they got an assurance from the county commissioners that they will roll back the county's 2022 property tax rate to 100% offset any increased revenues from this year's reassessments of residential properties. Dalton City Council members said they plan a 100% rollback of the city's tax rate from 2.208 mills to 1.998 mills. One mill is $1 for every $1,000 of assessed value.

"We agreed to keep our share of the LOST flat in the understanding that there would be no new taxes on our taxpayers," said Mayor David Pennington.

On Friday, Pennington said county officials have given city officials sufficient assurance that they will roll back the property tax rate 100%.

But Pennington said even with a 100% rollback, some property owners would get hit with a tax increase because their assessment rose by more than the cut.

He said the increase would fall more on residential property owners because their assessments rose on average 22%, compared to 15% for commercial and industrial properties, and he said the impact on residential property owners would be even larger in the city of Dalton where about 70% of the tax digest is commercial and industrial and only 30% residential.

"Ninety percent of the impact of any tax increase will fall on residential property owners," he said.

And he noted that the city and the county "aren't the big players here."

"It's the school systems," he said.

Pennington noted typically around two-thirds of a property owner's total property tax bill is school taxes.

"The county school system hasn't set its tax rate yet," he said. "But the city school system is looking at a tax increase because they aren't rolling their tax rate all the way back."

On Tuesday, the Dalton Board of Education tentatively voted to adopt a tax rate of 7.95 mills, down from 8.095 mills in 2021. The full rollback rate for the school system would be 7.328 mills.

"The reduction of the millage rate takes off about 2%, so it ends up being about an 8% increase for an existing property owner," said Theresa Perry, chief financial officer for Dalton Public Schools.

A property owner with a home that was valued at $125,000 prior to this year's reassessment and that increased in value to $138,090 with the reassessment would see about an $88 increase for his or her school portion on his or her tax bill this year with a reduced millage rate of 7.95.

The Dalton school board will hold hearings on the proposed rate at 8 a.m. and 6:30 p.m. on Monday, Aug. 22, and 6:30 p.m. on Tuesday, Aug. 30, and hold the final adoption at the last hearing. All will be in the City Council chambers of City Hall and are open to the public.

"We're not locked in at 7.95 (mills) — we can look at lower than 7.95 — the board may or may not be comfortable going lower," said school board chairman Matt Evans.

Staff writer Ryan Anderson contributed to this story.