Key points:
• The Norcross City Council is considering an increase of 150% to business and occupational license taxes, after a public hearing anticipated for July.
• The proposed rate hike aims to raise $600,000 for the fiscal year 2027 budget, which would balance revenues and expenditures, according to Norcross officials.
• Norcross’ citywide budget of $62.6 million, with a $23.5 million operating budget, is set for final approval in August after more discussions and public hearings.
The Norcross City Council discussed increasing the occupational license tax rate on businesses by 150%, raising about $600,000 in operating revenue to balance the city’s 2027 budget.
If the council approves the rate increase, which requires a public hearing, the city’s business occupational tax revenue would increase from about $425,000 to $1.06 million, according to the Norcross Finance Department.
In May, council members indicated they preferred 150% rate increase option. In fiscal year 2028, the strategy calls for restructuring the occupational tax system to match a business’s “gross receipts.”
Increasing business occupational taxes
A city memo says “comparisons of occupation taxes collected by the City of Norcross, with a peer set of 14 other jurisdictions in Gwinnett, Fulton, and DeKalb counties, and documented that businesses in Norcross presently pay significantly lower Occupation Taxes than comparable businesses in peer communities.”
City Manager Eric Johnson, who is departing Norcross in September, said the rate increase requires a public hearing in three weeks at the June 6 regular meeting. He said city officials understand the significance of the increase.
“We’ve had the impact of a constitutional amendment … our own referendum both impacting homestead properties,” Johnson said. “Rather than raise the millage as part of the budget, which hits everyone to some extent, largely businesses, this is an approach to say, ‘well, we tend to be high when it comes to our millage rate, we’re off the chart low when it comes to business and occupational license.'”
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Council Member Josh Bare said the city needs to notify local businesses of the increased tax burden and expressed skepticism.
“The budget is counting on this money, and it’s a major difference,” Bare said. “It seems like it’d be more something that you would sort of roll out over a couple of years.”
Council members Bruce Gaynor and Matt Myers confirmed that even with the increase, the city’s business and occupational license tax would still be the lowest among peer cities.
Next year’s budget and tax rate
Elected officials also discussed Norcross staff’s proposal to keep the property tax rate flat at 6.249 mills. If approved, the tax rate would stay the same for a fifth consecutive year.
Norcross voters overwhelmingly approved a new homestead exemption, drastically increasing the amount of a home’s assessed value shielded from city property taxes. Homeowners under age 65 saw their exemption jump from $9,000 to $45,000, and those 65 and older saw theirs increase from $18,000 to $90,000.
While the city has kept its millage rate flat for years, increasing property values mean homeowners are often paying more in city, county, and school taxes. A mill is $1 per $1,000 of a property’s taxable value.
Finance Director Jon Robinson said data from Gwinnett County’s most recent tax digest shows property taxes will remain flat this fall with the same millage rate. Because of new city homestead exemptions, homeowners may even be paying less.
“The rollback rate actually is the same as the millage rate that we proposed,” Robinson said. “At this time, we don’t see that we’ll have to have a scheduled public hearing, but if that changes in the next few weeks, as we continue to get more information from the county, we will present a new item.”
Norcross, which is a little over six square miles, has one of the smaller city budgets in the metro Atlanta core. Its citywide budget, including all multi-year funds, is $62.6 million. The operating budget is $23.5 million, with more than 40% of revenue coming in through property taxes.
The city of Dunwoody in DeKalb County, which is more than double the size of Norcross (in area and population), has an operating budget of $38 million. However, Dunwoody homeowners with a city exemption are taxed at just 2.04 mills.
In Norcross’ proposed 2027 operating budget, revenues and expenditures are expected to increase 4.7%. Elected officials will continue discussing next year’s budget in July, before public hearings and final approval in August.
