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Georgia’s Blight Tax: An overview

The last hard news series published by The Crossroads Chronicle covered the City of Swainsboro’s millage rate. This piece on Georgia’s “Blight Tax,” formally known as the Community Redevelopment Tax Incentive Program, will provide a little context leading up to The Chronicle’s next series.

According to the University of Georgia’s Carl Vinson Institute of Government, Georgia voters approved a constitutional amendment in 2002 allowing counties and municipalities to establish a tax incentive program to encourage property owners to remediate or redevelop blighted properties. While certain requirements apply, the idea was this program would decrease the burden on any given government while simultaneously encouraging private property owners to maintain their property.

Thanks to the vote, Georgia’s constitution now authorizes its counties and municipalities to establish a blight tax, but in order to do so, governing bodies must adopt an ordinance that includes certain provisions. The ordinance must establish standards for determining whether a property is blighted or not, a procedure for identifying blighted properties that provide the property owner with notice and a hearing opportunity, and standards for for rehabilitating the property.

One necessary element of note in regard to the blight tax is ad valorem tax and revenue. Participating governments must specify an increase rate of ad valorem tax, set by applying a higher factor by an ordinary millage while properties are blighted. Once the property has been improved, participating governments must specify a decreased rate, set by applying a lower factor to an ordinary millage rate for a number of years. Participating governments may separate revenues earned by the blight tax, and these revenues may be used only for community redevelopment. Some examples of the uses for the revenue might be demolishing structures and acquiring and clearing land.

According to Georgia’s constitution, blight, “at a minimum, [is] property that constitutes endangerment to public health or safety.”

Common procedural steps include inspecting the property, a written inspection report, written determination that the property is blighted, written notice being given to the property owner, notice of where and when the owner can view the determination and request a hearing, a hearing date being set by the municipal court, the municipal court giving written determination, and appealing to a superior court.

Like with anything, legal challenges exist within the blight tax program. Some of the legal challenges often include finding the appropriate owner for notice and drafting the ordinance to meet the needs of a particular municipality, among others.

Implementation challenges exist as well. Some of these include: making the public aware and helping them understand what the blight tax is, how it applies, and what it doesn’t do (like raising school taxes); establishing appropriate deadlines; identifying properties best suited for the tool; and legal costs in drafting and adopting the program.

Albany adopted the blight tax in 2008. Griffin followed in 2009. Lyons, Kennesaw, Cedartow, and Americus all adopted the program in 2015. Rockmart and Sandy Springs did the same in 2015. Acworth, Savannah, and Dublin moved forward with their own respective adoptions in 2016, and Cobb County as well as Conyers adopted the program in 2017.

Some possible positive outcomes from the blight tax are increasing property owners’ participation in maintaining their properties, improving blighted areas, increasing tax revenue, and community investment and involvement.

A case student involving the City of Griffin’s usage of the program indicates it didn’t work for them. Granted, the city only used it a handful of times—and those handful of times never got through remediation. Griffin used the program for mostly commercial properties. Tracing owners and creating incentives became a challenging as well. Griffin found that most owners of blighted properties tended to not pay ad valorem/property taxes, anyway.

A case study involving the City of Albany’s usage of the blight tax states that in the first eight to nine years, it was only used twice. Elected officials there were receptive of the program, which, in their area was limited to commercial properties. The City of Albany suggests that municipalities considering using the program make the millage factor high enough to motivate or push tax foreclosure in order for best results.

Dublin’s case study reflects their city did not use the tax to generate revenue. They found the process to be “long and slow” with “no clear results.” The City of Dublin also states the program cost more than it generated. This particular government used applied the program for more vacant, residential properties as opposed to Griffin and Albany using it for commercial properties.

In conclusion, the Carl Vinson Institute says this program shouldn’t be counted on as a revenue generator; instead, it should be viewed and used as an improvement tool.

In the coming weeks, The Chronicle will look to the City of Swainsboro officials to get their take on the blight tax. Additionally, this series aims to answer questions about blighted properties in the area.

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