Retain

and Attract Seniors for Economic Growth in Fulton

and Atlanta

Proposed House Bill: City of Fulton County and Atlanta homeowners
who are 65 years of age on or before January 1 are entitled to an
exemption from the Public School Property Tax.

Seniors can have a substantially positive economic impact on a city, county, and
state. They spend money at local businesses and pay city, county, SPLOST, and state
taxes. Because their incomes do not depend on local economic volatility, seniors
provide economic stability to a community. Seniors volunteer, help with day care
for grandchildren, visit restaurants during the week, support cultural events, and
tend not to strain the infrastructure during rush hours. In a recent University of
Georgia economic study entitled Golden Rules: Evaluating Retiree-Based Economic
Development in Georgia, director Jeffrey Humphreys recommends aggressive
marketing and a concerted rather than passive approach to recruit amenity-
seeking retirees as well as to retain those who already live here.

Economic Value of Seniors
The Golden Rules study by Humphreys is one of the few to measure the economic
impact of seniors. This study directly targets Georgia. Humphreys found that in an
average 12-month period (using 2007 to 2011 to average), 15,805 retirees moved to
Georgia from other states and from abroad. These in-migrating retirees brought
$325 million to Georgia while the retirees leaving Georgia took $241 million away.
That is an economic gain of $83 million for the state. According to the study, this net
gain defines Georgia as a magnet for seniors.

Unlike past stereotypes of the elderly might have suggested, the seniors of today
typically live healthy, active, and productive lives for decades after retirement, and
they spend money. The Golden Rules study estimates the total economic impact of
the annual in-migrating 15,805 seniors on output, income, and state GDP was $941
million.

The influence of in-migrating retirees on the job market is phenomenal. The
University of Georgia study found that one in-migrating retiree creates .54 jobs.
Thus, 1.8 in-migrating retirees will generate one job, and 100 will generate 54 jobs.
The in-migrating 15,805 retirees mentioned in the study generated 8,574 full and
part-time jobs.

As mentioned, these 15,805 in-migrating retirees had an annual economic impact of
$941 million in sales. They spend money on goods and services, home construction,
and medical assistance that is paid through Medicare. The net worth of these in-
migrating retirees is $8 billion. The Golden Rules study only considered the impact
of in-migrating seniors and did not estimate the negative impact of seniors who

move out of the state. Recall that retirees leaving Georgia (an average of 8,506
annually) took $241 million out of the state. Thus, for maximum economic impact,
the state wants to prevent economic loss by both retaining and attracting seniors.

Atlanta Not Competitive for Retaining and Attracting Seniors
Census reports for the last decade from 2000 to 2010 show that seniors are not
staying in the city of Atlanta. During that decade the national average for growth in
the 65+ age group was 15.1% while the total population growth was 9.7%. For the
city of Atlanta, the growth for the 65+ age group was not quite 2%. This suggests
that even the expected natural aging bubble of 55+ year olds from 2000 did not stay
in the city of Atlanta. Meanwhile, the state of Georgia grew by 30% in the 65+ age
group, twice that of the national average. Similarly, other metro counties had
extraordinary growth among the 65+ residents. Forsyth grew in that group by
125%. Cobb grew by 111%. (Attachments 3 and 4)

During the last census report decade, population in the city of Atlanta remained
stagnant while the surrounding metro counties saw dramatic growth. The total
population increase of the 10 county metro area was 678,371. Gwinnett grew by
216,873. The Cobb population grew by 80,327, and Cherokee expanded by 72,443.
For the city of Atlanta, the population growth was only 3,529, the lowest growth in
the 10 county metro area. Previous estimates had predicted a far greater growth
within the city. As a consequence of the low growth, Atlanta lost millions in federal
dollars that are linked to the census report. (Attachments 1 and 2)

Fulton County Lags Metro Counties in Senior Growth
Fulton Countys population growth was not stagnant. The total population grew by
104,575 in the last census report decade. The increase in the Fulton senior 65+
population was 21%. This percent is higher than the national average of 15.1% but
lower than the state average of 31%. The 21% growth is also low for the 20 metro
county area. Other than Atlanta with 2% growth, only Barrow with 13% and DeKalb
with 17% had less growth in the senior population than Fulton.

All the metro counties certainly have the amenities to attract young retirees who are
healthy and wealthy. The city of Atlanta and Fulton should be at the top of the list
with amenities that include shops, restaurants, theaters, museums, and urban
walking areas. Atlanta and Fulton have all of these. However, Atlanta and Fulton
are losing out in this market, and the neighboring counties with school tax
exemptions are reaping the economic benefits of seniors and showing exceptional
growth rates.

Counties Offering Senior School Tax Exemptions
Not surprisingly, retirees consider taxes when they move. Most seniors are on a
fixed income which usually includes a pension and Social Security. The Golden Rules
study estimated that on the average a single in-migrating retiree has an income of
$24,902 which would mean that a senior couple would have an average household
income of $49,804. According to the study, seniors tend to spend the entire amount

each year, but they must make wise choices. Interestingly, the income of an out-
migrating Georgia retiree is a little higher at $28,405, so a few more dollars are lost
by failure to retain each existing seniors.

The school tax is a significant part of the property tax. In Atlanta, for example, the
school tax is over 50% of the property tax burden. Relief from this tax can be the
decision maker for many retirees.

Nine of the metro counties offer seniors complete school tax exemptions with no
income restrictions. Those counties are Carroll, Clayton, Cobb, Douglas, Forsyth,
Hall, Henry, Paulding, and Walton. As noted by the census data, these counties have
experienced dramatic growth in the 65+ age group. These counties with the
exemptions attract seniors at a rate much higher than the national average.
(Attachments 5-8) Interestingly, Forsyth County passed a complete senior school
tax exemption for age 65+ in 2000, and by 2009 the Forsyth County News reported
that Forsyth was the fastest growing county in the nation.

Cost of Senior School Tax Exemption
A senior school tax exemption bill was proposed seven years ago for the city of
Atlanta as House Bill #1263 and sponsored by LaNett Stanley-Turner. It was passed
by the Metro House Delegation but stopped by the Metro Senate Delegation. The
reason given for rejection was that APS Superintendent Beverly Hall was doing a
great job and needed as much money as possible.

Although no official cost analysis was made for House Bill #1263, estimates were
that probably no more than 7% of Atlanta homeowners are seniors, and some of
them do not own property and thus do not pay school taxes..

In an effort to understand exactly how much these exemptions would cost, City
Councilwoman Yolanda Adrean talked with an official in the Fulton County Tax
Department. Fulton County Chairman John Eaves, who also wishes to bring tax
relief to local seniors, recommended this official who confirmed that the problem in
calculating cost is that no birth dates are recorded with home ownership on
property tax records.

The total amount of school tax paid by Atlanta and Fulton seniors 65+ is probably
less than 2% of the annual budget for the schools. Although each school system will
most likely object to a loss of money from any senior exemption, the reality is that
the taxpaying seniors are already relocating. Looking at the population data by age
groups, the shift comes with the 45 to 64 year olds as people plan for the future.
The Golden Rules study says that most seniors plan ahead and decide before age 65
where they will relocate. As a result, Atlanta and Fulton are losing valuable revenue
and human capital because there is no complete school tax exemption. Seniors have
no incentive to stay in Atlanta and Fulton.

Building Boom Revenue Offsets Senior School Tax Exemption

Atlanta and Fulton are currently experiencing a building boom. New construction is
surging. According to the 11/30/14 Atlanta Journal-Constitution, the millennials
are driving this new Atlanta apartment surge and experts say much of the growth is
due to increased demand from millennials who are putting off home purchases. The
same AJC article predicts that these millennials will move outside the perimeter to
buy their first houses, thus never being fully invested in the Atlanta community.
While renters do not directly pay school taxes, the building owners do.

A complete list of new buildings for Atlanta and Fulton with the projected school
revenue has not been possible to obtain. However, Garth Peters of the Buckhead
Coalition provided a recent list of the new buildings in Buckhead which is presented
in Attachment 9. His summary shows that 30 new buildings are built, announced, or
under construction in Buckhead. This includes over 9,000 residential units. In
addition, two new office building with over a million square feet of space are not
mentioned in his report. The same detailed information for Midtown, Downtown,
and Fulton could not be obtained. The previously mentioned AJC article notes that
Midtown has new 350-unit projects planned, and the Atlantas Beltline is expecting
two big developments.

Although a comprehensive building list could not be completed, the new buildings in
Buckhead alone sound like a windfall in new tax revenue for the Atlanta school
system. This new revenue should more than pay for a senior school tax exemption.

In a competitive market, is Atlanta now pushing out the old to bring in the new? Is
this similar to what has happened recently in cities like San Francisco where only
the young techies can afford housing? To grow and prosper, Atlanta should not only
welcome the new millennials but also welcome their longterm stakeholders and the
baby boomers, many of whom are looking for an urban home in the Sunbelt.

Conclusion
According to the Golden Rules study, people stopped relocating during the recent
recession. Now the economic factors are ripe for increased mobility. Census
reports project that in the next 15 years (2015 to 2030) the senior population 65+
will grow by 53% compared to a growth of only 3% of the 18 to 64 year olds.
Atlanta and Fulton can benefit from the retirement of these baby boomers. Now is
the time to act before this 14 year window is gone forever. Retain and attract
seniors with school tax exemptions. Seniors have already paid for 2.5 generations of
students.

Without providing exemptions, Atlanta and Fulton are shutting the door to an
important and economically significant segment of the population. The time for this
exemption is long overdue. The recent construction explosion will provide the
money to cover the senior school tax exemptions. This timely opportunity should
not be missed. Act to make Atlanta and Fulton competitive with the surrounding

counties. Provide an incentive to retain and attract the economic stimulus that this
growing segment of the population has shown it can deliver. (Attachment 10)

Implementation
Surrounding counties have used different models to implement senior school tax
exemptions. The exemption could be immediate at a designated age as was passed
in Cobb in 1978, or it could be phased in over a 5-year period as is done in Henry
County. The increments could start with age 70 and gradually move down to age 65,
or the increments could be a percent off the assessment which could begin at age 65
and end at 100% at age 70. Whatever the formula, something most be done to stop
the drain. Atlanta silently lost the Braves to Cobb, and now Atlanta is silently losing
the social and economic value that seniors provide.

List of Attachments

Attachment 1: ARC Population Data (4 decades) and Estimates

Attachment 2: Growth of Age 65+ (2000-2010)

Attachment 3: Census Report on Selected Age Growth (2000-2010)

Attachment 4: Percent Increase in 2000-2010 Age 65+ Population Growth

Attachment 5: List of Metro Counties with 100% Senior Exemptions

Attachment 6: Comparison of Senior Growth with 100% Exemptions

Attachment 7: List of Senior Exemptions in the 20 Metro Counties

Attachment 8: County Map of Percent of 65+ (2000-2010)

Attachment 9: Recent, New, and Proposed Building in Buckhead

Attachment 10: Annual Economic Impact of In-Migrating Retirees


Reference:
Golden Rules: Evaluating Retiree-Based Economic Development in Georgia
http://www.terry.uga.edu/media/documents/selig/golden-rules-2013.pdf

Director Jeffrey Humphreys
Selig Center for Economic Growth
Terry College of Business
University of Georgia
August 2013

Attachment 10: Annual Economic Impact of In-Migrating Retirees

Table 3.1
Annual Economic Impact of In-Migrating Retirees
on Output, Labor Income, and State GDP in Georgia
(2011 dollars)

Initial
Spending

Total
Output
Impact

Total
Value Added
Impact

Total
Labor Income
Impact

Output
Multiplier

Consumer expenditures
Medicare
New home construction

393,576,110
163,961,070
94,357,600

480,575,881
283,150,340
176,953,446

279,557,722
172,122,041
92,940,914

175,965,223
126,634,457
62,505,342

1.22
1.73
1.88

Total, retiree-related spending

651,894,780

940,679,667

544,620,677

365,105,022

1.44

Category

Notes:
The impact of initial spending on output, value added, and labor income was estimated using the IMPLAN Professional System provided by MIG, Inc.,
version 3.0, Type SAM multipliers, and 2011 data. Output refers to the value of total production, including domestic and foreign trade. Value added
includes employee compensation, proprietary income, other property type income, and indirect business taxes. Labor income includes both the total
payroll costs of workers who are paid by employers and payment received by self-employed individuals. The spending and impact estimates are for
a single year (one 12-month period) based on population data obtained from the U.S. Census Bureaus Current Population Survey for the ve-year
period 2007-2011.

Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2013.

Table 3.2
Annual Economic Impact of In-Migrating Retirees
on Employment in Georgia
(full- and part-time jobs)

Category
Consumer expenditures
Medicare
New home construction

Initial
Spending

Direct
Employment
(jobs)

Total
Employment
Impact
(jobs)

Direct Job
Employment
Multiplier

Employment
Multiplier Per $Million
Initial Spending

393,576,110
163,961,070
94,357,600

2,982
1,442
688

4,670
2,555
1,349

1.6
1.8
2.0

11.9
15.6
14.3

Total, retiree-related spending 651,894,780

5,112

8,574

1.7

13.2

Notes:
The impact of initial spending on employment was estimated using the IMPLAN Professional System provided by MIG, Inc., version 3.0, Type SAM
multipliers, and 2011 data. The employment estimates are for a single year (one 12-month period) based on population data obtained from the U.S.
Census Bureaus Current Population Survey for the ve-year period 2007-2011.

Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia, 2013.

From "Golden Rules" by Jeffrey Humphreys

15