The Georgia Senate easily approved a bill Tuesday that would provide property tax relief for homeowners, but could cause problems for public school districts and local governments.
Senate Bill 382 essentially undoes part of a previous bill passed two years ago that created a homestead exemption capping increases in taxable value on single-family homes at the rate of inflation. The legislation allows county commissions, city councils and school boards to opt out of the cap, which several metro Atlanta school boards did last year.
Senate Republicans who spoke in support of the bill framed it as an affordability issue. An explosive real estate market caused property taxes to spike in some areas, even if tax rates didn’t increase.
Sen. Chuck Hufstetler, R-Rome, who sponsored both bills, said local municipalities can raise revenue through other means.
“We have local governments, mostly school districts, saying they will not be able to pay their bills unless they continue these (property tax) double-digit increases, and they forget that while homeowner taxes can only go up the rate of inflation, they can still increase the millage rate, and that the majority of property, which is not homeowner property, can still go up unchecked.”
Officials with Atlanta Public Schools aren’t sure they could make up for the lost revenue should SB 382 pass.
“Around 75% of our operating budget comes from local revenue,” said APS CFO Lisa Bracken during a school board meeting Monday. “We know that more than 50% of that comes from residential properties, and so … it would be a huge impact.”
The bill does make it easier for school districts to collect a one-cent sales tax to offset some of the revenue they may lose from property taxes, but Bracken said APS would still come up short.
“For context, we have about $815 million a year that comes in local property taxes,” she said. “Our (one-cent sales tax) is around $650 (million) over the course of five years, so that penny tax will not even come close to offsetting what that local revenue looks like on a given year.”
Bracken added that commercial properties in Fulton County have been undervalued for years, limiting revenue the district can collect. Other metro Atlanta school districts said they’re monitoring the bill as it moves through the Legislature.
The issue sparked a fiery debate in the Senate, where some Democrats expressed skepticism that Republicans were concerned about making homes more affordable.
“I want to talk about the folks that can’t even buy a home,” said Derek Mallow, D-Savannah. “I want to talk about the … minimum wage in the state of Georgia that’s $5.15 (an hour). I want to talk about the corporate welfare that we hand out.”
Sen. Elena Parent, D-Atlanta, said the legislation wouldn’t do much to address high housing costs.
“We really need to see a lot more ‘build, baby, build,’ and this (bill) just isn’t going to get the job done,” she said.
Sen. Greg Dolezal, R-Cumming, countered that by saying high property taxes have kept his in-laws from retiring.
“This is not something that … we can think about in terms of, ‘Well, we can just push this aside and increase housing supply to solve the problem.’” He said. “It won’t solve the problem.”
Sen. Jaha Howard, D-Smyrna, voted for the bill because he said some relief for property owners is better than nothing.
“I don’t think this solution is great,” he said. “It’s OK. It’s something, but it’s not enough.”
The bill passed 31-19 and is headed to the House.
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