ATLANTA — For Georgians frustrated by rising property taxes, lawmakers say they have a solution: capping the amount of taxes on a home’s increasing value.
With early voting underway, voters are set to decide on a state constitutional amendment that would limit increases in home values for property tax purposes to the broader rate of inflation each year.
Supporters say it will protect current homeowners from increasingly high property taxes, but opponents say the cap unfairly imposes a burden on new homeowners, renters and other It warns that the burden will be shifted to property owners.
Georgia will be one of eight states where voters will decide on property tax measures on November 5, illustrating how rising taxes are impacting politics across the country.
The most important is North Dakota, where a referendum calls for the repeal of current property taxes for all purposes except repayment of existing debt. Many officials, including traditionally low-tax Republicans, are fighting the bill, saying such major changes could disrupt essential state and local government services.
Questions are also being asked in Florida, Arizona, Colorado, Illinois, New Mexico and Wyoming.
Home prices are rising across the country as demand outstrips supply, and that increase in value could translate into higher taxes.
From 2018 to 2022, total property assessed values across Georgia rose nearly 39%, according to numbers from the Georgia Department of Revenue. Most governments have secured revenue increases without raising tax rates or increasing employee salaries or other expenditures. Statewide property tax collections increased 41% from 2018 to 2022.
Lawmakers heard from voters and responded with a constitutional amendment bill. State Senate Finance Chairman Chuck Hufstetler, a Rome Republican who helped write the bill, calls tax increases based on higher ratings a “backdoor tax increase.”
“I think some homeowners, especially seniors, are having taxes taken out of their homes,” Hufstetler said. “They don’t even have any income anymore, and their taxes are going up.”
This protection lasts as long as someone owns the home. When you sell your home, the appraised value is reset to market value.
Dozens of Georgia counties, cities and school systems already operate under similar local assessment caps.
There was little opposition, and early voters interviewed this week were generally positive. Brad Turney, who owns a condo in Atlanta’s Midtown area, is also a supporter.
“I don’t want it to get out of hand. I think this might be helpful,” Turney said after voting in suburban Sandy Springs.
But schools are wary, warning that the cap could leave them short of needed funding. This is especially true since most school districts cannot raise property taxes above a certain level.
To allay schools’ concerns, the measure gives local governments and school districts the right to opt out until March 1. Those that don’t will be permanently capped.
“You can only opt out once, and that’s it,” said John Zauner, executive director of the Georgia School Superintendents Association. He expects many systems may be shut down.
Hufstetler said it would be a “mistake” to opt out.
Caps on assessments create disparities, where people end up paying higher taxes than their neighbors just because they bought a home later. Audrey Yushkov, senior policy analyst at the Tax Foundation, warned that the move could make it more difficult to buy a home in the future. That’s because new buyers will face higher bills, and longtime owners will have an incentive to stay in their current homes. Taxes are low. The Tax Foundation is a Washington, D.C.-based group that has traditionally been skeptical of tax increases.
“There is a lock-in effect for current homeowners, and a lock-out effect for new home buyers,” Yushkov said.
These effects are so prevalent in California that in 1978 the state enacted an even stricter assessment cap, Proposition 13.
Yushkov also pointed out that the proposed amendments would not prevent apartments and other commercial properties from having higher assessed values, which would result in higher taxes being passed on to renters.
The measure also includes a provision that would allow city and county governments to raise sales taxes by one penny for every dollar of sales in lieu of property taxes. Hufstetler praised the provision, saying it would allow the government to tax tourists who pay for local services. However, Yushkov called this a loser and said that property taxes are more transparent because people not only receive a large bill once a year, but also because services are clearly linked to taxes. Ta.
