(The Center Square) — Some Georgia governments are considering opting out of a bill that limits the increase of a homestead property’s value to the rate of inflation.
House Bill 581 was presented as a constitutional amendment. Voters gave their stamp of approval to the measure in November, with 63% saying “yes.”
Cities and counties would be allowed to enact a one-cent special purpose, local option sales tax for property tax relief.
The bill, which takes effect Jan. 1, was lauded by some as a way to keep costs low for Georgia families.
“HB 581 limits increases in property taxes year to year, reforms the appeals process, and allows for more transparency in our taxation procedures,” Lt. Governor Burt Jones said in a statement. “With the passage of HB 581, we can continue to lower costs while eliminating confusion in Georgia’s local property taxation process.”
The law allows governments to opt-out, but they must file a form with the Secretary of State’s Office by March 1. They must show that they held three public hearings, with one being held in the evening hours on a business day, that were publicized by local media.
But some entities have already announced they are opting out, saying it could affect their bottom line.
The Thomaston-Upson County Board of Education announced hearings for January, according to a report in the Upson Beacon.
The school system said in a statement about the bill posted online that it could be forced to cut staff or increase the millage rate.
“Rural and low-income districts, which rely heavily on property tax revenues, will be particularly affected,” the statement said. “These districts already face limited tax bases and a smaller pool of taxable property.”
Monroe County and the county’s school board are also starting the process of opting out, according to a report by WMAZ. School boards in Wilkinson and Bibb counties are, too. Other local publications say their school boards are beginning or considering the process.
In Brantley County, officials there said their current property tax freeze is better than House Bill 581, according to a report in the Brantley Beacon.
The bill could have other implications, according to an October analysis by the Tax Foundation. Assessment limits would make homeowners less willing to sell their homes, since their new home would rest to the new, current market value.
“Likewise, prospective homebuyers in 2025 and beyond will have a harder time accessing housing that fits their current budgets due to the unwillingness of current homeowners to list their houses on the market, and the disincentives this policy creates for new construction,” the Tax Foundation said. “This makes it harder for new residents to access housing and could discourage homeownership or shift purchasing patterns to less attractive options among the next generation of Georgia residents who are incentivized to purchase homes that they otherwise would not have purchased.”
