Georgia Legislature looking to place a cap on property assessments

  • Home
  • All
  • Georgia Legislature looking to place a cap on property assessments
Photo by Dean Hesse

By Zoe Seiler

This story has been updated. 

Atlanta, GA — The Georgia General Assembly is considering a few bills this session that deal with property assessments, and one of them aims to put a cap on home value increases at 3%.

If the cap becomes law, residential property owners may not see such dramatic increases in their home values every year. If Senate Bill 349 is passed, a statewide floating homestead exemption would be implemented for counties, cities, and schools, according to an analysis of the bill State Sen. Elena Parent (D – Senate District 42) shared with Decaturish.

“For jurisdictions with existing floating homestead exemptions, the taxpayer will receive whichever exemption is the largest: the floating homestead exemption under this bill or the local floating homestead exemption,” the analysis says. “Existing state and local (non-floating) homestead exemptions will still apply after the floating homestead exemption has been calculated.”

SB 349 passed the Senate on Feb. 15 with a vote of 42-7. The state House has not yet voted on the bill. If the House passes the bill, and it’s signed by the governor, it would be on the ballot in November as a referendum for voters to approve.

It also seeks to adjust the way millage rates are set. Under the bill, as long as the millage rate is not increased, only one advertisement and a public hearing would be required to adopt the rate. Currently, local governments have to hold three public hearings if their millage rate is above the state’s rollback rate.

The tax estimate would also be removed from the notice of current assessment and exemptions would be required to be shown, according to the analysis.

Parent said that this bill would provide more transparency for homeowners as to why their property taxes go up, and could also provide more certainty.

“We know that rising taxes can push seniors and other property owners out of their homes, so allowing the home values to increase at a more modest, predictable pace, seems like a proposal worthy of consideration,” Parent said.

Municipalities and school systems could be impacted as well, but it depends on the local homestead exemption laws, Parent said.

“There is some concern from certain municipalities and school systems that this could cause them to lose some funding that they currently receive, but, if that’s the case, the funding could be achieved by raising the millage rate, unless the cap has been reached,” Parent said.

Homeowners would likely see a lower property tax bill with a cap of 3% on assessments. Property taxes, however, make up a large portion of revenue for local governments and school districts, said Rohan Ganduri, assistant professor of finance at Emory University.

“A large part of the school financing comes from property taxes. If you cap property taxes to 3% and if inflation goes at a much higher rate, the market values in that area go up, and you’re not able to collect enough property taxes then the quality of schooling is likely to go down because those are the taxes that fund teacher salaries, etcetera,” Ganduri said.

He added that the indirect effect of this legislation on county or city services could be as equally big, if not bigger, as the impact on homeowners.

“If we all care about the quality of schools, quality of water, sanitation and those kinds of things, because those also add to our quality of life if the provision of those is reduced in quality then it’s not really clear whether homeowners are better off because of this bill or not,” Ganduri said.

Decatur Mayor Patti Garrett said she has some concerns about a fixed cap on home values and noted there are some positive aspects to the bill with the proposed changes to the taxpayer bill of rights.

“A one-size-fits-all blanket limit does not consider the different level of services and costs incurred within particular municipalities and school systems within the state. We would much prefer to see more local control over issues such as tax assessments,” Garrett said. “Many cities address assessment increases by increasing homestead exemptions and lowering millage rates.”

She also cautioned that there could be unintended consequences of the bill.

A 3% cap on home value increases would also mean school districts could receive less revenue from property taxes, even as the market grows. The Georgia School Boards Association testified against the bill when it went through the committees in the state Senate.

“We’re sympathetic to the issue of rising property taxes and rising property values in general and how they’ve gone up tremendously over the last few years,” said Justin Pauly, director of communications for the Georgia School Boards Association. “We recognize it’s an issue and that we need to figure out something, but this one seems a bit more limiting to local government.”

While school districts could raise their millage rates, many can only raise their millage rates to 20 mills, although a few districts, like DeKalb County Schools and City Schools of Decatur, have a higher cap or no limit. The DeKalb County School District and CSD both have a cap of 25 mills.

Cities and counties don’t have a cap on their millage rates, so they have other ways to make up revenue if there’s a cap on property assessments.

“They can make up that money in different ways than schools districts [can], so it’s a bigger impact on the schools,” Pauly said. “School districts are trying to listen to their communities. They understand the challenges for property owners, especially those with limited incomes, and trying to put some things into place or rolling back their millage rate far enough to where they won’t lose equalization.”

Several school districts have passed homestead exemptions. Decatur and DeKalb schools passed senior homestead exemptions last year.