OPINION: House takes up property tax relief legislation

House members adopted HB 143, which addresses the governor’s proposal to eliminate funding for the homeowner tax relief grants to local governments. The end of these grants would result in a property tax increase of approximately $300 per year for the average homeowner.

The legislation passed on Jan. 30 would require the tax relief grants to be awarded this year. This is very important because the funding was included in the budget passed last year, and county governments and school boards across the state have established their millage rates and budgets accordingly. The grants would remain in place in future years if state revenues grow by certain percentages.

Was HB 143 absolutely necessary for the state to keep its promise of tax relief this year? No, because the legislature could restore the $429 million for the homeowners’ grants through the budgeting process. Also, the federal stimulus package or a turnaround in the state’s economy could alleviate the need for the revenue trigger requirements in future years.

The legislation is important, though, because it sends a message to the governor that state government can balance the budget without breaking its word to the taxpayers and retroactively imposing a tax increase. HB 143 now goes to the Senate for its consideration.

Meanwhile, the House Ways and Means Committee favorably reported a proposed constitutional amendment, HR 1, which would limit the annual increases on the reassessment valuation of both residential and nonresidential property to three percent, or the rate of inflation, whichever is lower.

Under the proposed change, property values could be reassessed upon the sale or transfer of the property at fair market value, which would not exceed the sales price. The amendment would also ratify property tax freezes and limitations already in place in some counties.

HR 1 is similar in principle to legislation I have introduced and argued for in previous years because it addresses the “back-door” tax increases by local governments that use valuation assessment hikes to bring in more revenue without raising the millage rate. This particular proposal might need some perfecting before it reaches the House floor, but the idea of ending back-door tax increases is very important for all Georgia homeowners.

As a proposed constitutional amendment, HR 1 still must be approved by two thirds of both the House and the Senate, and then by a majority of the voters in the next general election.

While these measures represent some movement to address property taxes, unfortunately even more tax-shift-and-spend proposals that have been commonplace the past six years have been introduced this year by the governor and members of the legislative leadership, including:

•An additional $400 million in education funding shifts from the state to local schools, which will mean higher taxes for property owners.

•A 1.6 percent provider tax on the revenues of hospitals and insurance plans, driving up health care costs for the consumers.

•A $5 admission tax on patrons of adult entertainment clubs.

•A state tobacco tax increase of $1 per pack of cigarettes.

•A statewide sales tax increase for transportation.

•A regional sales tax increase for transportation.

•A $10 tax increase on annual car tags.

Once a pattern of tax increases, budget shell games and spending sprees has been established, as it has in Georgia the past several years, it apparently becomes easier to repeat year after year. Those legislators who have been voting to enable this pattern can figure out how we got here by looking in the mirror.

Most of Georgia’s budget problems are systemic in nature rather than recession-driven. Instead of addressing these issues through common sense, moderation and fiscal responsibility, this administration and ruling majority appear intent on balancing the budget by keeping their hands in the taxpayers’ pockets.

Rep. Alan Powell (D-Hartwell) represents the 29th District (Franklin, Hart and Madison counties) in the Georgia House of Representatives. Contact him at 507 Coverdell Office Building, Atlanta, GA 30334; by phone at 404-656-0202 or by e-mail at alanpowell23@hotmail.com. For more information, visitwww.alanpowell.net.