Governor Sonny Perdue filed legislation on Thursday to eliminate the state portion of property taxes for Georgians.
If the legislation passes, residents will be able to vote this November on a referendum to eliminate the state’s portion of ad valorem taxes collected on homes, land, vehicles and personal property.
"This constitutional amendment will give Georgia property owners an annual break on their ever-increasing property tax bills," Perdue said in a press release.
But don’t look for a huge break.
While the legislation is estimated to save taxpayers $94 million in state property taxes during the plan’s first year of implementation, Bryan County Tax Assessor Dan Rollf said it won’t impact most taxpayers very much.
He used the example of a $175,000 house. Its taxable value is 40 percent, or $70,000. Without a homestead exemption, that’s a savings of $17.50 a year.
"It sounds very good," Rollf said. "But in the long run, that savings is not going to significantly help a taxpayer."
The Governor’s Office Deputy Press Secretary Marshall Guest said the elimination, unlike many other current tax proposals, is not a tax shift.
"It’s an elimination of the property tax all together," Guest said. "That money would essentially be off the books and currently the state has $1.5 billion in reserves."
The way it works now is local governments assess properties and set their own millage rates to collect revenues. The state adds a quarter mill to the local ad valorem taxes on property such as homes, land, automobiles and personal property. The proposed legislation would completely eliminate the state portion of the property tax collections.
Perdue also announced that the the Department of Revenue has released an amended rule change to clarify the state has no role in mandating reassessments of properties.
"Local governments will no longer be able to blame the state for requiring reassessments on any certain timetable," Perdue said. "Local governments have always had and continue to have the responsibility for determining fair-market value of property, when to reassess, and be accountable to the voters for those decisions."
Rollf said Bryan County has always been held accountable for this rule, but said there are indirect ways the state can get a reevaluation.
"They cannot, and do not, tell anybody that they have to reassess or reevaluate their property," Rollf said. "But we’re required to be within a certain number of parameters. If we fall out of those parameters, the county can be fined… They’ll never tell you to do a reval, but they’ll make it real expensive until you do one."
He gave the example of Macintosh County who, not long ago, was on the verge of being penalized $5 per parcel until they fixed their property value ratios.
"It’s intended to force the county into doing something the state can’t tell them to do," he said.
The state’s parameters say fair market property values must lie within 10 percent of what the state says they should be. Rollf said this creates a uniformity of everyone with similar property values basically being taxed the same throughout the state.
Guest said the intent of the rule change is to clarify that counties are not required to reassess every three years.
"If they want to make that decision, the burden is all on the local government as to whether or not they do a reassessment or a reevaluation," he said.
Charles Willey, spokesman for the Department of Revenue, said the three year rule was always a guideline, never a requirement. He also said the parameters will remain the same even with the rule change.
"It was in the rule book that it was to be done every three years and it’s been eliminated because some counties thought it was required. It had always been a guideline," Willey said. "The main aim is to try to have uniformity across the state."
If the legislation is passed by the General Assembly for the property tax elimination, it will go to the voters on the November statewide ballot as this referendum:
"Shall the Constitution of Georgia be amended so as to eliminate the state's power to annually levy an ad valorem tax on tangible property for any purpose except for defending the state in an emergency but to provide for the state's continued administrative role in the levy of ad valorem taxes by local governments?"