Georgia lawmakers push local governments to reconsider escaping a property tax cap
A sign announcing a home for sale is posted outside a home, Thursday, Feb. 1, 2024, in Acworth, Ga., near Atlanta. (AP Photo/Mike Stewart)
ATLANTA (AP) — Georgia’s voters said in November that they wanted property tax relief, but many local governments are holding on to their power to raise taxes despite the statewide vote.
Now state lawmakers are trying to push local governments to reconsider and agree to limit how much of a home’s increasing value can be taxed.
From 2018 to 2023, the total assessed value of property across Georgia rose by nearly 61%, according to figures from the Georgia Department of Revenue. Values rose so fast that most local governments pocketed increased revenue even as they lowered tax rates, and statewide property tax collections rose 44% from 2018 to 2023.
Senate Finance Committee Chairman Chuck Hufstetler, a Rome Republican, calls it a “backdoor tax increase.”
Amid the uproar over tax bills, lawmakers put a state constitutional amendment on the ballot in November to limit how much of a home’s rising value can be translated into higher property taxes. State politicians sought instead to index a property’s taxable value to the broader rate of inflation each year.
Nearly 63% of Georgia voters backed the cap, making the state one of eight where voters decided property tax measures in November, a sign of how rising tax bills are influencing politics nationwide.
But Georgia’s plan gave local governments a one-time chance to escape the limit if they acted by March 1, and they exercised that right in droves. Almost two-thirds of the state’s 180 school districts opted out, representing 75% of Georgia’s 1.75 million students statewide, according to filings with the secretary of state. So did a quarter of Georgia’s 159 counties and 20% of its more than 500 cities.
Citing their own rising expenses, local officials said the tax cap could force them to give up revenue they might need in the future. Officials in Gwinnett County — Georgia’s largest school district, with 183,000 students — forecast that the cap could cut tax revenue by $35 million a year.
Hufstetler and other Republicans, unhappy that so many governments opted out, want them to change their minds. Some lawmakers are trying to force local governments in their districts to accept the cap. At least a dozen bills are advancing in the state Capitol to set local referendums in which voters could mandate that their local government abide by the cap.
On Tuesday, senators attempted something more like persuasion. Senators voted 52-2 for House Bill 92, which would give governments another chance to agree to the limits. The measure goes back to the House for more debate.
Local governments that have exited could change their minds and agree to the tax cap through March 1, 2029. In the meantime, those governments would have to print notices on tax bills encouraging citizens to call them if they have concerns.
As a concession, the bill would exempt school districts from having to pay sales taxes on construction materials if they agree to the cap.
“It does continue to allow opportunities for them to look back, particularly in a couple of years from now, when they could look back and see how minimal it is,” Hufstetler said after the vote. “Yet it protects the homeowners.”
The bill passed Tuesday would force some local governments to vote again in 2027 to exit the cap, and hold another round of public meetings. Any government that didn’t complete the steps would be put under the cap permanently.
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