Shifting of tax burden begins

LAWRENCEVILLE - Just a year after Gwinnett began offering tax breaks in an effort to bring more business to the community and shift the tax burden away from residents, the tax burden has started to tip in the other direction.

But officials aren't celebrating yet.

They aren't sure if the trend will continue, and they aren't attributing the turn to this year's economic development efforts.

"I would love to take credit for the improvement in the digest split," government Economic Development Director Alfie Meek wrote in an e-mail. "However, the county's economic development efforts are too new to have had that much of an impact."

Instead, both Meek and Gwinnett Chamber Economic Development Director Scott Morris agree that the tax base has shifted closer to a 50-50 split between businesses and residents because the residential growth of the county has slowed - not because the business growth improved.

Plus, the tax assessors office made changes to the property values of many properties.

"We have shown some improvements this year with the program in place," Chairman Charles Bannister said. "As time goes on, hopefully we'll do better."

Morris said the residential growth in the county is not in trouble, but instead it was relatively flat in 2006. Retail centers continued to be built, but Morris said the county still has to improve its high-end office market in order to improve the tax base.

"Obviously this is a turn in the right direction," Meek said. "The right balance is one that provides for a stable fiscal picture for the county. Given the quality, type and level of services we provide, I think an even split between residential and commercial would be a good balance."

In early 2006, spurred by a shift in the tax burden toward the residential taxpayers, who cost more to serve than they bring in tax revenues, county commissioners agreed to offer tax breaks to businesses considering a move to the area.

So far, only one company, Hewlett-Packard, has received the tax break, although two smaller projects are on the commission agenda for Tuesday.

"The incentives accelerated some commercial activity, but it wasn't meant to be a panacea," Morris said.

While charts of the county's tax base show a slight turn back toward 50-50, the work isn't complete. Morris said the reassessments provided a "blip," but the permit action in 2006 could become a trend, especially if the economic development efforts are concentrated on offices. Tax allocation districts, which were rejected by voters this year, would help, he said.

"If you do those things, it's not a blip," he said. "We can make it sustainable."