Teri Anulewicz, Rich Golick Disagree About Ad Valorem Tax

Not everyone is singing happy birthday about the elimination of the state's ad valorem vehicle tax, sometimes referred to as "the birthday tax." At Thursday’s meeting of the Smyrna Area Council , Ward 3 City Council Representative Teri Anulewicz asked Smyrna’s state representatives and senator about what the tax cut means for local governments who rely on ad valorem tax revenues.

“I appreciate that the governor and our elected officials have said, ‘Oh we promise and we pledge and we’re going to make it happen,’ but no one has explained to me how exactly the state is going to ensure that I do not have to make difficult budget decisions because a bunch of other folks want to say they’ve made a tax cut,” she said.

Anulewicz said that about $1.3 million of Smyrna’s annual budget comes from ad valorem tax revenue. She added that, in her opinion, the city has maintained a healthy, balanced budget throughout the recession due to the efforts of city staff.

based on 8.99 mills, the millage rate since 2007, with no pay cuts, no furlough days, no layoffs, no major cuts in services and without the use of reserve funds.

What are your thoughts on the elimination of the birthday tax? Tell us in the comments.

Anulewicz said she and other Smyrna city officials have yet to receive any information from the state about how cities will be compensated. Smyrna state Rep. Rich Golick told Anulewicz a fee schedule is outlined in the legislation itself.

“You take a giant step back looking at it a bit more globally from the last five or six years, we’ve all had to make sacrifices,” he said. “We have cut spending because we’ve had to cut spending. We’ve had one of two choices; we cut spending or raise taxes. Our constituents, and we share the same constituents, have said they prefer we cut spending and we have.”

After the meeting, Golick told Smyrna-Vinings Patch that he and Anulewicz had different philosophical views on how government should operate.

“I think Councilwoman Anulewicz’s comments are unfortunate and it reflects a fundamental difference in approach,” he said. “Our approach is one to put as much taxpayer money back in taxpayers’ pockets because that’s where it came from.

“While the city of Smyrna does an outstanding job—I’ve heard very few if any complaints from an operational standpoint over the course of years—our core mission is not to prop up local government. It’s to help where we can, but it’s really to remember the government originates with the people.”

Golick explained that he thinks getting rid of ad valorem tax will represent a significant savings to taxpayers over time.

“The net net on this thing is the sales tax on vehicles goes away,” he said. “In substitute of that you have a one-time title fee. So that’s really a wash with the sales tax. Where the taxpayer benefit comes from is in the elimination of the birthday tax. And that over the course of five or six years depending on the value of he vehicle, could be thousands of dollars even for what I’ll call a standard-type vehicle like a Honda Accord or something like that.”

Beginning March 1, 2013, those purchasing new vehicles will no longer have to pay an annual ad valorem tax, but will instead pay a title tax. Those who purchased a vehicle before 2013 will stay pay ad valorem tax until they buy a new car. Anulewicz said she's concerned about the impact this will have at the local level.

"I’m very protective of my constituents and our citizens here," she said. "I want to make sure that we’re basically not going to have to make up a shortfall because of politics. It all has to come from somewhere and I just think it’s disingenuous if what the purpose of this is is for folks in the legislature to say, ‘Well we did a tax cut.’ In the meantime the local folks are still having to make it up."

During the meeting state Sen. Doug Stoner assured Anulewicz the legislature worked closely with the Georgia Municipal Association and the Association County Commissioners of Georgia when drafting the law to make sure the concerns of local governments were adequately represented. He also said the legislature has the capacity to review the law and adjust the percentages of the title tax in 2015 if it’s not generating enough revenue.

State Rep. Stacey Evans said she struggled with the decision, but ultimately voted in favor of it when she realized Georgia was one of the few states left that still levied an ad valorem tax on vehicles.

“Other states had the same issue were local governments were relying on these funds and they learned to make it work,” she said. “I know that we’ve been sending out best practices so we make it work like it’s worked in other states. So I was heartened by that.”