In Georgia, residents grappling with escalating property tax bills have a potential remedy that state lawmakers are advocating: a constitutional amendment limiting how much a home’s increasing value can be taxed annually.
As early voting kicks off, citizens will vote on this measure, which aims to restrict property tax increases to the rate of inflation for each year, thereby providing some protection for homeowners against soaring tax bills.
Proponents of the amendment argue it will safeguard existing homeowners, while critics contend that such a cap would unfairly transfer the burden to newcomers, tenants, and other property owners.
Georgia joins seven other states where voters will consider property tax initiatives on November 5, reflecting a growing national trend influenced by escalating tax bills.
A notable example is North Dakota, where a referendum seeks to eliminate property taxes for all purposes apart from repaying existing debt. Many officials, including those traditionally favoring low taxes, argue that such a sweeping change could harm crucial services provided by state and local governments.
Questions concerning property taxes will also appear on ballots in states like Florida, Arizona, Colorado, Illinois, New Mexico, and Wyoming.
The nationwide surge in housing prices, fueled by demand outpacing supply, has led to corresponding increases in property taxes.
Data from the Georgia Department of Revenue indicates that from 2018 to 2022, the total assessed value of properties in Georgia climbed nearly 39%. During this period, most local governments benefited from increased revenues without raising tax rates, which allowed for employee pay enhancements and additional spending.
Statewide property tax collections saw a 41% rise from 2018 to 2022, prompting lawmakers to take action following constituents’ concerns regarding rising taxes.
Chuck Hufstetler, the Republican Chairman of the Senate Finance Committee and a key architect of the proposed amendment, characterized the increased valuations as a “backdoor tax increase.”
Hufstetler expressed concern for vulnerable homeowners, especially the elderly, who may feel the strain of growing taxes despite having limited or fixed incomes.
The proposed protection would remain valid for as long as the individual owns their home; however, the assessed value would reset to current market value when sold.
Numerous Georgia counties, cities, and school systems already implement similar local assessment caps.
Initial feedback from early voters has largely been supportive, with no significant opposition reported.
One supporter, Brad Turney, who owns a unit in Atlanta’s Midtown, stated he believes this measure could prevent uncontrolled increases in taxes.
However, educational institutions have expressed concern, cautioning that such caps may hinder their funding, particularly as many school districts are restricted from increasing property tax rates beyond certain thresholds.
To address these concerns, the proposed measure grants local governments and school districts until March 1 to opt out; any entities choosing not to will be subject to the cap permanently.
John Zauner, the executive director of the Georgia School Superintendents Association, commented that many school systems may decide to withdraw, highlighting the high stakes involved.
Hufstetler has countered that opting out would be a “mistake.”
The implementation of assessment caps often results in disparities, as newer homeowners may face higher taxes than their neighbors.
Audrey Yushkov, a senior policy analyst for the Tax Foundation, cautioned that this amendment could further complicate the housing market.
She notes a potential “lock-in effect” for long-term homeowners and a “lock-out effect” for new buyers, making it difficult for new entrants to acquire homes while current owners may hesitate to sell for fear of higher tax bills.
These issues have already been observed in California, which introduced a more stringent assessment cap known as Proposition 13 back in 1978.
Furthermore, Yushkov highlighted that higher property tax assessments may be passed on to renters, since the amendment does not apply to apartments and other commercial properties.
The proposal also introduces a provision that would allow local governments to raise sales taxes by one cent on the dollar to offset property taxes.
Hufstetler supports this addition, asserting that it enables governments to tap into tourist spending for funding local services.
However, Yushkov criticized this approach, emphasizing that property taxes offer clearer accountability and are more easily understood by taxpayers through a singular annual bill directly associated with the services provided.
