"General Assembly passed in 2009 a bill requiring us to consider bank sales as legitimate, arms length sales and no body could predict or foresee how much that could affect the digest. So when you filter in a bank sale -- which is obviously not a qualified arm's length sale, but according to the General Assembly it is -- you've got houses that banks are just unloading for half their value and when we have to consider that into our ratio studies, that's what lowered the values so much," Floyd said, adding those sales are the result of more than 1,000 foreclosures in Bartow in 2009.
Bank sales are just one factor, Floyd said. A $33 million decrease in the collective value of motor vehicles throughout the county lowered the digest by 1 percent alone.
Tax Commissioner VaLenda Bailey said the dip was driven by economic factors and gas prices.
"The state values all vehicles and when the economy went down and all the SUVs and bigger vehicles that were more valuable, people [had been] seeking them. Well they stopped when the gasoline price went up. They lowered the value on those bigger things," Bailey said. "Not only that, we see big trucks, the transfer trucks and everything. These companies that have gone out of business can't utilize those vehicles, so that made a lot of difference. They could and should come on in and pay the taxes on it, but most of the time they don't because they just pay the penalty for not having paid them on time when and if they do tag it.
"That's the bigger thing, the change in value by the state on vehicles, all those were lowered because of economic times. The car sales [also] were down."
Also taking a dive were commercial and industrial inventories, which Floyd said are down a "tremendous amount" -- commercial by $20 million and industrial inventories by $44 million.
"What [businesses] actually carry to resupply is way down, and it counts the floor items. It's just not what they've got in reserves, it's everything that's there," Floyd said, adding that predicting the actual drop was difficult with current economic conditions. "Economic statistics are based on trends. Back when the economy was normal, you could predict 5 to 6 percent growth every year because you had trends. You had data you could look back on. Now when it goes in reverse, you have no data. You just have to guess."
The county had used the estimated 2.5-percent drop to prepare a 2010 financial plan, but County Administrator Steve Bradley said Friday officials do not expect further cuts due to conservative budgeting and previous adjustments based on downward trends in the last few years. He added the drop in motor vehicle values cost the county about $2 million in tax revenue.
"[The decrease] was surprising, but luckily because of the way we budget, we had looked at those [line items] separately. What we typically do on those other line items is to look at those historically and make the adjustments either up or down. The big one is motor vehicle, and we had made the downward adjustment on it. Had we not done that, we would be scrambling but we're not because when I went back and looked at the 5 percent the digest is down and how we budgeted everything, I think we're going to be OK," Bradley said. "We tend to budget revenue items conservatively anyway, and we generally predict a lower amount than we'll actually get. ... At this time, it does not look we're going to be having more cuts. It looks like what we've done, including the furloughs and retirement incentive, we'll be on a balanced budget at the end of the year. But we don't know for sure what the rest of the year looks like."
In January, Commissioner Clarence Brown approved a budget continuing employee furloughs and a drastic decrease in vehicle and equipment purchases and most training and travel expenses enacted in 2009. More than 30 county employees accepted the early retirement incentive offered last year.
Although Floyd said Bartow is "in good shape" compared to surrounding counties, for him the dip in the digest is an indication economic recovery has not yet begun.
"It doesn't look good. We're having the same data coming in now. Things have not improved," Floyd said. "The deeds we're seeing in 2010 are not any better than they were in 2009. You have no way of knowing about automobiles and personal property and business and industrial inventories but as far as real estate, it's no better."
Floyd said Paulding County's 2010 property tax digest is down 18 percent, while Douglas and Cherokee counties took a 15 and 8 percent dip, respectively.
"Those counties are heavily, heavily residential. Paulding County has 9,000 unsold vacant lots and Cherokee, there's just more properties for banks to foreclose on," Floyd said. "We've got a good split between residential, commercial and industrial."