MillageRate.com

State Senator Chip Pearson has issued a press release to clarify just who is to blame for a significant jump in property tax bills this year. His publication exposes a primary problem with Georgia’s property tax code—state legislators who do not know what in the hell they are talking about.

This year, the State Legislature decided not to fund the Homeowners Tax Relief Grant; a decision that will result in tax bills higher by hundreds of dollars for Georgia property owners. Pearson is technically correct—the State Legislature did not “raise taxes”… although the loss of the state subsidy has the same effect:

Property tax bills are determined by the local government (counties and cities) when they set the millage rate and the individual assessed property value.  HTRG is a GRANT the state extends to local governments based upon revenue dollars.  Property values are not shaped by this grant that may or may not be available from year to year.  The purpose is to provide property tax relief for Georgia homeowners when there is a state revenue surplus.

The grant essentially returns some of your state tax dollars to you (via your local government) as a subsidy of your tax bill. This year, the state couldn’t afford to give you back your money. Your county can’t afford to take up the slack, so it is passing the lost revenue on to you and blaming the State Legislature.

Via the HTRG subsidy, the state essentially allowed local governments to “hide” increases in the cost of government. The grant allowed local politicians to increase spending without raising the millage rate… which would have been a clue to taxpayers that their elected officials’ spending needed a closer look.

When the grant was suspended for this year, the subsidized spending was exposed.

It is interesting that Pearson calls the HTRG “unreliable.” If he was truly interested in “transparency and honesty” as he says, he would introduce legislation to end the HTRG permanently.

What angered me most about Pearson’s article was his effort to shift the blame for higher tax bills.

For example, Pearson blamed Democrats and local government lobbyists for stopping SB-83, which would have doubled the Homestead Exemption. What Pearson fails to understand is that exemptions shift the cost of government from residential properties to commercial properties and remove taxable value from the Tax Digest, often forcing local governments to increase millage rates. Rural areas with a higher “residential to commercial” ratio are the hardest  hit.

State politicians love exemptions because they get to look like the “good guy” while local government officials are left to face angry taxpayers when they are forced to compensate with higher tax rates.

If Pearson was truly interested in “transparency and honesty” as he says, he would introduce legislation to end the homestead exemption permanently.

Even worse was his bragging about the Legislature did pass this year regarding property taxes. You can read elsewhere in this site about the sheer stupidity of the tax legislation that did make it to the Governor’s desk.

For example, Pearson lauded HB-233, a bill passed last year to freeze assessed values for two years. For all of the machinations and arm-twisting required to pass it, HB-233 was one of the most worthless pieces of legislation considered this year. The assessment ‘freeze’ only has an effect if values are increasing and, for at least this year and next values are going down, not up.

Pearson weakened the property assessment process with SB-55, a law that essentially requires county assessors to disregard standard mass appraisal practices. By requiring assessors to consider distressed properties and foreclosures in the appraisal process, Pearson’s bill introduced even greater inequity in values. Sadly, Pearson will never understand this.

If you are a regular reader of MillageRate.com, you know that there is only one way to protect property owners from overtaxation, force local officials to control the cost of government and promote transparency and honesty in the property tax process—require local taxing authorities to simply “do the math.”

Georgia Senate Press Office » Blog Archive » Setting the Record Straight on Property Taxes