- Georgia lawmakers are responding to concerns about rising property taxes due to rising home values.
- The Senate Finance Committee has scheduled a hearing on a bill that would limit annual increases in home assessed values for property tax purposes to 3%.
- The measure requires voter approval in a referendum in November.
Rising home values have led to higher property taxes for many Georgia homeowners, prompting calls for relief among state lawmakers in an election year.
The Georgia Senate Finance Committee has scheduled a hearing Monday on a bill that would limit home value increases in property tax assessments to 3% a year. This restriction lasts as long as the owner maintains the homestead exemption. Voters must approve the plan in a referendum in November.
Meanwhile, Republican House Speaker John Burns of Newington has proposed doubling the state's homestead tax exemption, which could reduce taxes by nearly $100 million statewide. is high.
Georgia Gov. Kemp predicts fiscal growth, state economist warns of recession
But Georgia isn't the only state where lawmakers are responding to voter dissatisfaction with levy increases.
Homes are for sale in Rutledge, Georgia. Georgia lawmakers are proposing a measure in 2024 to stop property taxes from rising due to skyrocketing property values. (AP Photo/John Bazemore, File)
“Property taxes are likely to be the biggest tax issue this year in many states,” said Jared Walczak of the Tax Foundation, a group that studies taxes and is critical of tax hikes.
In Texas, voters in November approved a plan to cut property taxes by $18 billion. Kansas' Democratic governor and Republican-majority legislature both support expanding $100 million a year in tax breaks for homeowners. The Colorado Legislature approved an increase in housing tax exemptions and a reduction in assessment rates during a special session in November. Pennsylvania uses lottery proceeds to reduce property taxes and provide rental assistance for the elderly and disabled.
Georgia fuel tax rollback allows drivers to temporarily avoid paying state tax on gasoline
In Georgia, proponents argue that capping the taxable value of homes would prevent school districts, cities and counties from relying on rising values to raise tax revenue. Republicans have long pushed local governments to lower their tax rates to even out the bill, even requiring ads that say they will raise taxes if they fail to do so.
Finance Chairman Chuck Hufstetler, R-Rome, who is sponsoring Senate Bill 349, said many school districts and governments are instead getting higher revenue based on dollar amounts.
“We've seen an increase of 40 percent in their collections in just a few years,” Hufstetler told The Associated Press on Friday. “And instead of lowering the millage tax rate, they're using that as a backdoor tax increase. And I think there needs to be some moderation on this.”
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.
Many governments and school districts have used the profits from rising prices to increase employee pay and cover expenses ballooned by inflation. The 3% cap could mean the government would have to raise tax rates instead. In states like California and Colorado, property tax limits have been criticized for holding local governments back.
At least 39 counties, 35 cities and 27 school systems in Georgia have adopted local laws that limit the amount of increases in assessed values, according to the Georgia Boards Association. Some of these restrictions only benefit homeowners who are 65 years of age or older.
Republican Lt. Gov. Bert Jones supports Hufstetler's bill, saying it will prevent “significant and unexpected increases in home prices.” He also has the support of at least one Democrat, Atlanta state Sen. Jason Estevez.
“A big part of this bill is to allow people to stay in their homes,” Estevez said, noting that tax increases are forcing owners to sell or move.
But state House leaders are leery of imposing a statewide assessment cap, saying the choice should be left to local communities. They instead support Burns' tax exemption expansion.
“Our hope is to maintain local control,” House Ways and Means Chairman Shaw Blackmon, a Republican from Kathleen, said Friday.
Georgia begins second year of income tax refunds
Caps can suppress the value of a home the longer you own it, meaning long-term residents may end up paying less in taxes than newcomers. That's already the case in some Georgia communities with local caps.
Suzanne Weidenhouse, chief appraiser for the Muscogee County Board of Assessors, told a House committee in October that homeowners in Columbus paid $7.79 in property taxes last year, while their recently arrived neighbors in similar homes paid $3,236.19. He said he paid. Its owners would have paid more except for a $950 million property tax rebate supported by Gov. Brian Kemp.
More than $2 billion in property value in Columbus is protected from taxation by the Homestead Exemption, which does not allow for appreciation in value. This will change the tax burden for commercial and industrial property owners as well as renters, Weidenhouse said.
“Whenever you start putting a cap on value, you create inequality,” Weidenhouse said.
