Some Georgia school districts could see their property tax rates reduced under a House bill that would allow school districts with fewer real estate assets to continue receiving state aid even if their property tax rates are lowered.
The House passed House Bill 987 161-12 on Tuesday, sending it to the Senate for further discussion.
The measure would allow school districts to lower their minimum property tax rate to 10 mills from the current 14 mills, while still qualifying for state equalization funds.
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“This bill has the potential to lower property taxes for thousands of Georgians across the state,” said Republican Rep. John Corbett of Lake Park.
This is one of a series of measures to reduce property taxes that the Georgia Legislature is considering this year. The House also wants to expand the statewide housing tax exemption to reduce the property tax burden for homeowners in some counties. The Senate, by contrast, seeks to limit future increases in homeowner property values assessed for tax purposes. Senators believe this measure could reduce future property tax increases.
Aerial photo showing the Georgia State Capitol in Atlanta. (Joe Soum/Visions of America/Universal Images Group via Getty Images)
In recent years, some school districts have told voters that even though property tax values have increased, they cannot lower their tax rates because they would no longer be eligible to receive millions of dollars in equalization funds. ing.
Georgia is distributing $756 million in equalization funds this year, and school districts are allowed to spend their share as needed. The funding is intended to ensure that school districts that don’t have a lot of valuable taxable assets have enough money to educate their students. A 2019 study by Georgia State University scholar Nicholas Warner found that districts in the southeastern part of the state have traditionally benefited the most.
The equalization program began in 1987, required a minimum tax rate, and cost the state $84 million. But as the program’s costs rose and state tax revenues stagnated, lawmakers rewrote the program to require districts to tax properties with 14 or more factories to participate starting in 2019.
The requirement conflicts with another goal of Republican lawmakers, which is to lower tax rates when property values rise to keep districts’ total tax revenue at a certain level.
“There are school systems in the state that are stuck at the required 14-mill rate because they don’t want to jeopardize parity even though they could lower it,” said Rep. Chas Cannon of Moultrie. said. Republicans support this bill. “In doing so, they pass on sometimes significant property tax increases to the public each year.”
Statistics show that Georgia’s overall property tax collections increased by 41% from 2018 to 2022. During the same period, the total assessed value of real estate across the state increased by nearly 39%. These Georgia Department of Revenue numbers represent new construction as well as existing properties. Therefore, it does not clearly state how much the assessed value of existing real estate has increased.
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Cannon’s bill would for the first time reduce the amount of equalization money paid to districts below the 10-mill floor. These school districts will lose his 25% of equalization funding the following year.
