ATLANTA – Savings on your property tax bill could come at the expense of county or municipal services, warn officials trying to get a handle on competing tax-break plans in the Legislature.
Athens-Clarke County Mayor Heidi Davison estimated the county could lose $3-4 million under a proposal to cap property valuation increases at 2 percent a year for residen-tial property and 3 percent for commercial property, based on last year’s tax digest.
The consolidated government’s budget process is just be-ginning, and Davison could not identify where cuts would be likely. She said the commission would probably look first to its largest spending areas, health and public safety.
The hand-wringing could be premature as it’s unclear what kind of tax breaks, if any, the General Assembly will pass. The House plan would cap assessments and eliminate the car-tag tax, but the Senate version eliminated the car-tag tax in favor of a small reduction in state income taxes.
Meanwhile, Gov. Sonny Perdue has criticized both plans, and warns that decreasing state revenue makes tax cuts imprudent at this time.
As part of their contingency planning, Athens-Clarke de-partments always plan for a 3 percent revenue decrease and also identify where to target cuts in the budgets they submit to the commission for approval, Davison said.
In Chatham County, where property tax rates have been frozen since 1999, it’s still unclear what effect assessment caps would have.
Parity among property tax bills is another likely victim of the tax plan that passed the House, said Alan Essig, executive director of the Georgia Budget and Policy Institute, a private think tank.
Owners of two identical homes on the same block could find themselves paying vastly different property tax bills based on when they were purchased. A home that remains under the same ownership would see its tax bill increase slowly, while one that changes hands amid a strong housing market would be reassessed at a much higher value with each sale, Essig said.
"What you end up doing is shifting the tax burden to new homeowners," Essig said.
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