Gov. Sonny Perdue's statement that he'd like to see the homeowner tax grant program scrapped has local officials in a panic and some state lawmakers calling for a special legislative session.
Richmond County legislative delegation Chairman Quincy Murphy said what Mr. Perdue is proposing is a tax increase, and it will be permanent unless people speak out against it.
"If the citizens of our state do not rise up and let their voices be heard that they do not want a tax increase, and if they don't do it before November, it's possible the administration will go forward with eliminating those tax grants," he said.
Mr. Murphy wants lawmakers to return to Atlanta for a special session to deal with what he said could be "one of the most severe economic downturns in quite some time."
To alleviate the state's impending $1.6 billion revenue shortfall, Mr. Perdue froze $428 million in grants just as local governments' tax bills were about to go out. And he said Tuesday he'd like to see the grants eliminated because they have been "ineffective" in driving Georgia's property taxes down.
Loss of the grants means Augusta and the Richmond County school system would come up short $6.9 million this year, and Augusta taxpayers can look for drastic cuts in services, City Administrator Fred Russell said.
School officials have said they have not determined how to deal with the loss.
Mr. Russell said he expects the city to make $3.1 million in cuts or use more of the emergency fund to keep from raising property taxes.
"We're going to absorb the hit, or hit the fund balance," he said.
Sending another tax bill to collect $3.1 million the city expected to receive is an option, Mr. Russell said.
"That's probably one that to be fiscally responsible I will recommend. But you're placing the burden of almost $300 on our taxpayers that we had no control over," he said, referring to the extra amount in taxes most property owners would pay. "As you know, I was rebuffed greatly when I wanted to raise taxes $17.50. So to come back and say, 'I need another $300,' I just don't see that happening."
As for Mr. Perdue's statement that the tax grants have been used to help fatten local governments' coffers, Mr. Russell said Augusta's coffers aren't particularly fat, and the city depends on the money being there.
"I have no argument with the concept of the grants being good or bad," he said. "My argument is that you told us you were going to give us $3.1 million that we did not raise our local taxes to cover because that was a grant coming from the state," he said.
"Halfway through our budget year, you say that money's not there anymore. We're having enough financial issues, and most other governments are, just like the state, with increased costs, increased everything. But you've cut off the revenue stream that you basically promised us."
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