Debate over property taxes could define Georgia’s legislative elections

Republicans say homeowners desperately need relief from rising taxes, and they see raising sales taxes as a sensible way to pay for it. Democrats say the Republican plan would hurt low- and middle-income Georgians, who would end up paying more in taxes.

There is evidence to support both perspectives. An Atlanta Journal-Constitution analysis found median property tax bills are up 20% or more in 117 of Georgia’s 159 counties in recent years. They’re up more than 50% in some counties, including Clayton and Rockdale in metro Atlanta.

That has many Georgians crying for relief — cries that have reached the ears of elected officials.

“We’re trying to address a housing crisis and make housing more affordable not only for seniors, but for first-time homebuyers,” said state Rep. Scott Hilton, R-Peachtree Corners. “I think by helping eliminate property taxes, that gives access to critical housing.”

At the same time, experts say raising sales taxes to lower homeowners’ property taxes would shift more of the burden of paying for government services onto low- and middle-income people, who already pay a higher share of their income in taxes than the wealthy. Raising sales taxes would also mean higher prices for groceries, gas and other essentials.

“What they are trying to do is do a bait and switch,” state Rep. Tanya Miller, D-Atlanta, said after Democrats blocked Republican property tax proposals last week. “What they proposed today was nothing more than a tax, a tax increase on the people who are already hit the hardest.”

Republicans are already pushing back. Georgia’s Future, a nonprofit associated with House Speaker Jon Burns, paid for a digital ad blaming Democrats for keeping property tax bills high.

That debate is likely to continue through the November election and into next year’s legislative session. As the bitterness of the debate suggests, there’s no easy solution.

Paying for local services

Credit: Arvin Temkar/AJC

Credit: Arvin Temkar/AJC

Property taxes are the primary source of revenue for schools and local governments. Cutting property taxes means less funding for teachers, parks, police and other services — or finding other ways to pay for them.

David Sjoquist, professor emeritus of economics at Georgia State University, said property taxes are a reliable way to fund local services. He said they’re more stable than sales taxes. And he said it makes sense to levy property taxes to pay for local services that benefit homeowners, like police and fire protection and schools.

What’s more, sales taxes hit low- and middle-income people harder because they spend a higher portion of their income on essentials like groceries, gas and other taxed goods. In Georgia, the lowest 20% of earners pay 6% of their family income on sales taxes, according to the Institute on Taxation and Economic Policy. The top 1% of earners pay just 1% of their income in sales taxes.

The institute’s data shows property taxes are less “regressive” — the lowest 20% of Georgia earners pay 3.5% of their income in property taxes, compared to 1.8% for the top 1% of earners.

But Sjoquist said people don’t like the property tax “even if it’s theoretically good.” They pay sales taxes a few dollars at a time, so they don’t notice it as much, he said. But they get one big property tax bill a year or pay it monthly on their mortgage.

The result can be sticker shock. The U.S. Census Bureau data shows the median property tax in Fulton County rose nearly 27% from 2020 to 2024, the most recent year for which data is available.

Median taxes rose even faster in Gwinnett (36%), Cobb (37%), DeKalb (37%), Clayton (56%) and Rockdale (61%). In 2024, the median tax bill was more than $3,000 in seven Georgia counties, including Fulton ($4,033), Forsyth ($4,020), Gwinnett ($3,617), DeKalb ($3,310) and Fayette ($3,285) in metro Atlanta.

Assaf Harpaz, a tax law expert at the University of Georgia, said rising real estate prices are driving higher tax bills, which are based on a property’s value.

“Property owners might see a spike in their property tax liability even though they don’t experience a change in their other economic circumstances,” Harpaz said.

Last fall, an AJC survey found that, if given a choice, majorities of Democrats and Republicans would prefer property tax relief to income tax cuts.

Legislators respond

Credit: Arvin Temkar/AJC

Credit: Arvin Temkar/AJC

Legislators have heard those cries. In 2023 and again this year, the General Assembly approved one-time property tax rebates with bipartisan support. This year’s $850 million rebate is expected to reduce homeowners’ property tax bills by an average of $500.

Two years ago, lawmakers approved an optional “floating exemption” that caps increases in the taxable value of homes at the rate of inflation. But hundreds of local government and school districts opted out of the exemption, citing the potential loss of millions of dollars of revenue.

This year, the Republican-led General Assembly made the cap mandatory. They also allowed voters to approve new 1-penny sales taxes to offset county and city property taxes on people’s primary residences. School taxes, which typically account for the largest share of property taxes, would not be affected.

This month’s special session gave lawmakers a chance to get those referendums on the ballot in November. They introduced more than 90 bills authorizing referendums in counties and cities across Georgia.

But the Georgia Constitution requires property tax exemptions to get two-thirds approval from the state House and Senate. Democrats overwhelmingly voted against the referendums, and none of the bills passed.

Republicans accused Democrats of betraying Georgia taxpayers.

“I know how hard Georgia families are working to make ends meet,” state Sen. John Albers, R-Roswell, said in a statement the day after the session ended. “Yesterday, Senate Democrats chose to deny Georgians, including many of their own constituents, the right to vote on property tax relief.”

Democrats accused Republicans of trying to raise taxes.

“Democrats kept money in the pockets of everyday Georgians and prevented a severe hike at the cash register that would have forced working-class families to subsidize tax breaks for wealthy McMansion owners,” the Senate Democratic Caucus said in a written statement about the session.

Both sides made it clear they’ll try to use the votes against each other in this year’s election campaigns. But the debate likely won’t end there. Lawmakers can try again to approve local referendums when they convene next January.

Meanwhile, a House committee on local government taxes and funding begins meeting next month. It’s expected to release its recommendations by the end of the year.