For many years, I have introduced and supported legislation that would put an end to the back-door tax increases on local property owners that occur through the revaluation process.
On Thursday, Feb. 12, I joined a bipartisan majority in the House of Representatives who approved HB 233, which would establish a two-year moratorium on property reassessment increases.
A majority of House members also voted for HR 1, a proposed constitutional amendment that would have capped property assessment revaluations at 3 percent or the rate of inflation every year in the future. But as a proposed constitutional change, two-thirds approval was needed in the House, and Thursday’s vote fell short of that.
HB 233 addresses a major problem in our state: a property tax system that is broken and adversely affects all property owners: residential, commercial, agricultural and others. This moratorium, which now heads to the Senate for its consideration, would give citizens greater transparency and accountability when it comes to determining their local property taxes.
Under HB 233, reassessments are authorized under narrow guidelines, including substantially improved property and rezoned property, provided that the property owner requested the rezoning. During the moratorium, a sale or transfer of property would not result in an increase in the assessed value.
Existing or future homestead exemptions to protect homeowners, including previously enacted floating homestead exemptions, are not affected by this legislation. The moratorium would end in 2011.
These proposals generated a great deal of debate in opposition because of fears about the effect they would have on local governments. But this legislation would not stop local governments from raising the tax revenue they need to provide vital services in our communities. Government entities would not be prohibited from raising millage rates if necessary, rather than depending on higher reassessment valuation or the “back-door” tax increases I have railed against for years.
This legislation would establish a level of transparency in one part of the property tax system. It would allow local governments to point the finger at the root cause of local tax increases, whether it is unfunded mandates from the state or federal governments, or local decisions. There is nothing wrong with more transparency in the process, and the public deserves a simpler system to explain what they already know when they get a tax bill.
The only impact I foresee is a fairer system where all property – residential, commercial, agricultural and others – is held to a cap for assessed valuation and the value of which is reassessed when it changes hands.
The real problems our local governments and school boards face are the policies of unfunded mandates and cuts to local school funding by the state, expecting property owners to pick up the tab. These are the very reasons I have voted against past budgets, which is the correct action, rather than taking the easy way out.
While freezing property value reassessments is a responsible move toward transparency and hopefully tax relief for property owners, we still must be vigilant to watch out for the taxpayers the remainder of this session. Still on the table are further education funding shifts, a new tax on hospitals and insurers and their consumers, tobacco tax increases, a new tax disguised as increased fines for traffic violations, a car tag increase and new sales taxes, statewide and regional, for transportation. Also, there is the possibility the governor will veto HB 143, which guarantees this year’s funding for homeowner tax relief grants. Such a veto would cost the average taxpayer $200-$300.
As the session reaches its halfway point this week, we have yet to address the systemic problems in Georgia’s budget process that have us facing a $3 billion deficit. While some of our leaders are simultaneously criticizing the federal stimulus package and going to the mailbox every day in search of Georgia’s share of the pie, we are doing little to nothing about the excessive spending, borrowing and shifting that got us here in the first place.
Still another concern I am hearing involves legislation passed from the Senate, SB 31, which would allow Georgia Power to raise customer rates in order to finance the construction of new nuclear reactors, six years before they would be in operation. Besides this being more money coming out of citizens’ pockets, those of us around Lake Hartwell have to wonder how much more water will need to be drawn out of the lake to service these facilities. Please let me know your thoughts on this issue.
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 email@example.com. For more information, visitwww.alanpowell.net.
Thank you, Mr. Powell. You have the support of Democrats, Republicans and Independents alike in you district because of your reasonable, common sense approach.
There is an enormous groundswell of support for a Fair Tax, or sales tax based system to replace the current unfair property tax that forces a tiny minority of citizens to pay taxes while the majority pay less taxes or none at all, yet those taxpayers often have more resources than someone who happens to be a responsible person whose only fault is paying a mortgage every month.
Now is probably the best opportunity we will ever have to try a Fair Tax in Georgia. We have the support. We have the numbers. We see that the present system is not only not working, it is bankrupting the state. All we need now is for our representatives to get the job done. Not a cap. Not a patch. Real tax reform. Now is the time. Seize the moment.