In a ruling with potentially far-reaching consequences for homeowners and businesses, the Georgia Supreme Court on Wednesday struck down a fire service fee levied by Chatham County.
The county, where Savannah is located, must pay about $30 million in refunds and interest in the class-action lawsuit.
The high court upheld a superior court ruling that said the fee was effectively a property tax and was illegal because it was not based on value.
The opinion, written by Justice John J. Ellington, was unanimous among the participating justices, with one disqualified from the case.
The decision will affect other jurisdictions with similar fees, observers said.
To pay for fire services, those jurisdictions may need to rely instead on property tax revenue,
which could mean increases for homeowners and businesses, according to the Georgia Municipal Association.
"The cost of services delivered to tax-exempt properties such as hospitals, colleges, and non-profits would fall on property taxpayers alone," the organization said. "That represents a tax shift, where tax-exempt properties receive services at no cost while a subset of taxpayers covers the bill."
Clint Mueller, deputy director of ACCG, the group that represents county governments, said lawyers have been filing such class-action lawsuits across the state and that other counties have settled.
Chatham County's loss has now clarified the law for everyone, he said, liberating tax-exempt properties from paying for fire protection.
"For instance, churches are exempt from property taxes, but they were paying the fire fee," he said. "But we're still going to go put out the fire if the church catches on fire, right?"
Chatham County declined to comment. Three law firms representing the class-action plaintiffs did not return messages seeking comment.
Mueller said the now-illegal fees could be scaled to reflect the cost of putting out a fire. Owners of larger buildings paid more if the fee was assessed based on square footage, for instance. Industrial building owners might pay more if the fee was assessed based on property use.
Under a property tax, owners of higher-valued properties would simply pay more regardless of how costly they were to protect, he said.
Mueller said his group was planning to ask lawmakers to change the law back during the next legislative session.
This article is available through a partnership with Capitol Beat News Service, a project of the Georgia Press Association's nonprofit, tax-exempt Educational Foundation.
This article originally appeared on Savannah Morning News: Georgia Supreme Court ruling leaves Chatham County owing $30M
