Eddy Smith doesn’t understand how or why tax commissioners can get extra money for just doing their jobs.
The 67-year-old Henry County native and retired Toys R Us distribution center manager said he has tried for months to find out how much his city of McDonough pays Henry’s tax commissioner to collect the city’s property taxes. Smith still doesn’t know exactly where the money goes.
“I think it’s wrong because there’s nothing … that that person spends of his own personal money to collect the taxes,” Smith said this week.
He isn’t alone.
The Georgia House and Senate passed a bipartisan bill on the final day of the legislative session to prevent Gwinnett and Fulton county tax commissioners from directly negotiating for more money from cities to collect taxes.
Legislators are chipping at Georgia’s often-undisclosed fee system in which county tax commissioners can negotiate to receive personal payments for collecting the taxes of cities in their counties. All states that neighbor Georgia bar this practice.
An investigation by The Atlanta Journal-Constitution/Georgia News Lab uncovered that at least 48 county tax commissioners engage in the practice.
Senate Bill 201 would take the power to negotiate agreements for municipal tax collection out of the hands of tax commissioners in the two counties and pass it to the county commissioners. The law can only be blocked with a veto from Gov. Brian Kemp.
Fulton won’t be affected by the law yet, because of preexisting contracts between cities and Fulton’s tax commissioner Arthur Ferdinand. The law will apply to any tax commissioner after Ferdinand, who is in his 80s.
But the law is timely in Gwinnett County, where new tax commissioner Tiffany P. Porter has proposed charging eight cities fees of $2 per parcel, which would nearly double her $141,000 annual salary.
Taxing solutions
Gwinnett Commissioners Kirkland Carden and Ben Ku both said Friday that they support the legislation.
Carden doesn’t think a majority of the county commission will agree to Porter’s additional fees, and has said they will have to find a fair rate that works for both Porter and the cities. He added that Porter’s office is still negotiating with the cities.
“They’re trying to find some middle ground,” he said.
Porter disputed that in a statement provided to the AJC on Friday.
“I am not negotiating with the cities; it’s between the cities and the board of commissioners to determine if and how to move forward,” Porter’s statement says.
The legislature might write a similar law that applies across all 159 counties during its next session, said State Sen. Nikki Merritt, D-Grayson.
The current law is intended to help underpaid tax commissioners in rural counties, but now it has been “exploited and abused for personal profit,” said Merritt, who helped lead the charge in getting SB 201 passed in the Georgia Senate.
She said she’d consider letting tax commissioners in smaller counties continue setting their own agreements if they’re underpaid or reside in counties with few cities. The legislature could also look at setting a maximum amount that they’re able to receive through these types of fees, she said.
Lawrenceville, which paid $15,385 to the tax commissioner’s office in 2020, would pay more than $42,500 if Porter’s fees were imposed, according to a presentation by Gwinnett’s deputy tax commissioner.
Merritt said the cost for tax collection in Grayson and Berkeley Lake would increase by 480% and 301%, respectively.
Charlotte Nash, the former Republican chairman of the Gwinnett County Board of Commission, said she agrees with a cap, but wonders how much compensation for the extra work is fair.
“I can’t argue the fact that there is some additional responsibility,” Nash said, “but is it something that equates to doubling the responsibility from what their county base salary is? That seems a little bit exorbitant.”
Controversial taxman
Tax commissioners are fairly anonymous elected officials.
They oversee billing, collecting, processing and distributing taxes of all sorts — property, school, solid waste, public utilities, motor vehicle renewal. Tax commissioners ensure the green lifeblood of government is collected.
Ferdinand brings in $491,000 annually — making him the highest-paid elected official in Georgia. Of that, he made $330,000 from the cities, according to the 2019 investigation.
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A copy of his 2004 contract with the city of Atlanta, the largest contributor to his wallet, shows his agreement lasts 50 years or until a new commissioner takes over. Ferdinand was paid a flat rate of $1.90 for every parcel billed in 2004, then at $1 per parcel from 2005 and onward.
Ferdinand was appointed tax commissioner with a salary of $70,000 in 1997, and since then the former IBM executive has remained an unorthodox figure.
He started with a promise to erase Fulton’s $155 million in delinquent property tax debt, some of which dated back seven years. He published a scofflaw list of the county’s 40 biggest delinquent commercial or residential property tax bills that angered many. He also sold tax liens in bulk to private corporations, which charge interest. County commissioners unsuccessfully fought the effort.
Over the years, Ferdinand has regularly highlighted his track record of collecting nearly 99% of taxes.
All this has made him probably the most effective and controversial tax commissioner in Fulton history.
Ferdinand denied the AJC’s request for an interview but provided a statement that said the legislation “will have no impact” on his office or the cities that contract with it.
‘Our urgency’
Some cities in Georgia train staff to collect taxes. Others contract with the county tax commissioner to collect the cash.
Since 2013, Oconee County Tax Commissioner Jennifer Riddle has charged fees to cities that modestly increase her salary. The cities of Bishop, Bogart, North High Shoals and Watkinsville pay Riddle $1.50 per parcel for collecting their taxes, in addition to the $1 per-parcel fee paid to the county.
In 2020, the agreements supplemented Riddle’s $95,898 salary by just shy of $4,400.
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Fulton and Gwinnett counties “are much larger and the situation affects them differently,” Riddle said in an email.
The bill came after city leaders and Gwinnett county officials contacted their state representatives and senators, concerned about the proposed fees.
“I think it was a gross misstep, both from an administrative standpoint, but also politically,” said state Rep. Beth Moore, D-Peachtree Corners. “For (Porter) to propose a tripling of the fees that cities pay to the county to collect the city’s taxes was just a terrible proposal that really took a lot of the mayors and city councils off guard.”
Legislators discussed passing a bill that would prevent tax commissioners across Georgia from engaging in the practice, Merritt said, but they chose to wait until a later session to see how it’d impact tax commissioners in more rural counties.
The bill initially only applied to Gwinnett County, Merritt said, but some legislators felt uneasy about targeting a single county. It was recrafted to include Fulton County, despite the fact it won’t affect Ferdinand.
State Rep. Jasmine Clark, D-Lilburn, voted against Senate Bill 201 for targeting Gwinnett County. She said the practice needs to end “from the mountains of Catoosa County to the farms of Tifton County” while urging fellow representatives to vote against it.
The majority of Gwinnett legislators ultimately had one goal in mind — to pass the bill before the end of the session to prevent Porter from sealing the deal on her tax collection agreements with Gwinnett cities. The agreements would stay for at least four years, leading to “our urgency” in timely passing the bill, Merritt said.
In a response to criticism from county officials, Porter said that cities would save money by contracting with her office to collect their municipal taxes rather than doing it on their own, regardless of a fee increase.
Douglas County Tax Commissioner Greg Baker previously had agreements to collect municipal taxes for Douglasville and Villa Rica, but he said he has not reentered them yet.
“I had stopped wanting to do it for the cities, and the cities were looking at doing it themselves,” he said. “They came back and looked at the cost and said, ‘Please, do our taxes for us.’”
AJC staff writer Arielle Kass contributed to this story.
The story so far:
Fulton County Tax Commissioner Arthur Ferdinand and other tax commissioners have for years used a per-parcel fee to boost their personal take-home compensation. In March, Gwinnett tax commissioner Tiffany Porter proposed using the same negotiated fee system to increase her salary by more than $110,000. Legislators passed a bill on the final day of the legislative session requiring fee approval by the county commission. The bill also applies to Fulton County, but will not have impact because those contracts were negotiated prior to the bill’s passage.
A look at Fulton contracts
Arthur Ferdinand as Fulton County’s tax commissioner has contracts with multiple cities to collect their taxes. As provided by an antiquated state law, Ferdinand may negotiate to be paid a certain amount per parcel billed. Here’s a look at some of the contract terms, which last a half-century or until Ferdinand is no longer in office.
Atlanta: Signed in 2004, Ferdinand’s agreement with the city/Atlanta Public Schools lasts 50 years. Ferdinand was paid a flat rate of $1.90 for every parcel billed in 2004 (and backpay from 2003 at that rate), then at $1 per parcel from 2005 and onward.
South Fulton: The contract with South Fulton, signed August 2017 months after the city incorporated, runs 50 years. He receives $1 per each parcel taxed. The county also makes 1% of all money collected to run the billing operation.
Chattahoochee Hills: Ferdinand’s 2019 agreement with the small city lasts 50 years. Like South Fulton, receives $1 per each parcel taxed and Fulton takes 1% of the collections.
