Facing tough economic times, the state legislature has responded by tinkering with property tax systems in place across Georgia instead of devising a realistic solution for dealing with the projected down-surge in state tax revenue. This week they are using a stall technique (waiting to see what the federal stimulus plan will mean) to delay any cutting of state programs or projects. As though the federal plan will ship enough pork to Georgia to cover our state’s excessive spending.
The legislative session began with the governor seeking to eliminate the Homeowner Tax Relief Grant. That would have added a second tax bill ($200 to $300) to all Georgia homeowners this year. Legislators made it clear that option wasn’t going to fly.
And they were right. You can’t go back and stick recession-strapped homeowners will an unexpected tax bill. The legislature showed additional wisdom, adding the caveat that their defense of taxpayers this year won’t mean the grant can’t be axed in future years, but homeowners and counties may at least have some time to prepare before biting that bullet.
In an odd move, law makers then followed preservation of the grant by tinkering with the property tax system––something that could benefit from a revamp but not something directly impacting our current cash-strapped situation at the state level.
The plan to freeze taxable property values for two years was debated four hours Thursday and approved by the State House.
Under the freeze, property tax assessments couldn’t rise above what they were on January 1 for two years unless the property is improved.
There is a need to reform Georgia’s property tax system. But the timing, in the middle of a revenue crunch, seems more shell game that sound policy.
What's really off with this plan is that the state, with a projected $2.2 billion deficit, isn't exerting nearly as much effort to cut spending. The assessment freeze is only a token move that will affect how local school boards and counties collect taxes and won’t address state government’s money woes.
One legislator proudly proclaimed the assessment freeze would stop “backdoor tax increases” to homeowners. Opponents say it will keep local governments and school systems from gaining needed revenue.
The Association of County Commissioners said publicly the freeze wouldn’t save as much money for homeowners as maintaining the Homeowner Tax Relief Grant does, and they are among opponents who worry the assessment freeze will lead to small counties having trouble keeping up when fast growth returns.
In theory, for local systems like Pickens, increases in property tax values are designed to help the system keep pace with growth. The assumption is people moving into the county buy more expensive houses in higher priced subdivisions and pay a higher share of taxes than those of us in old houses, when it comes to funding the kids they bring to local classrooms.
In practice, however, it can work something like this: If someone pays high property taxes near you for the mansion they built, your property taxes go up as your land/home value increases in the assessor’s eye. That stinks to a rather rank ripeness if you view your house as more home than investment.
Regardless of long term effects from an assessment cap, now is not the time to tinker with a property tax system that hardly touches the state’s current funding issues. Governor Sonny Perdue says all the fat is already sliced from the state budget. Now it is time, he says, to cut things the state needs but can’t afford, as we try to balance our state budget, one shadowed with a projected $2.2 billion state tax revenue shortfall.
Given the widespread fall-off in real state sales and values, the assessment freeze wouldn’t touch a significant number of existing homes this year. A more timely measure for the state to tackle would be how to help local Boards of Assessors handle widespread decreases in property tax values.
A serious reform of the property tax system in Georgia is sorely needed. Just not now with more immediate problems facing us. |
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