A $1.6 billion state budget shortfall led Gov. Sonny Perdue this month to freeze the 2008 Homestead Tax Relief Grant, which would have returned $428 million in state tax credits to Georgia counties, cities and school systems.

Those governments might now have to dip into reserve funds or hit up taxpayers to cover the pending revenue loss.

The Augusta Chronicle asked Columbia County Tax Commissioner Kay Allen how the issue could affect regional homeowners.

Q: How does the tax credit work?

A: Since 1999, the governor and General Assembly of the state of Georgia have provided a Homestead Tax Relief Grant that has effectively reduced the amount of tax paid by those who receive a homestead exemption without reducing the revenue to the local government. In 1999, the amount of relief was based on $2,000 of assessed value and increased $2,000 each year for the next three years. Since 2002, it has been based on $8,000 of assessed value.

Q: What does it mean to property tax payers?

A: Nothing, yet. Tax bills were mailed (in Columbia and Richmond counties) giving the ... credit to all property owners that are qualified to receive a homestead exemption.

Q: How does the state "rebate" the money?

A: The state normally sends a check to the tax commissioner within 60 days of my request report. I disburse the money out to all the jurisdictions. When the funds are released for 2008, I will handle it in the same manner. (The public should) have already received the savings benefit in the form of paying less in taxes. Look at the matrix on the bottom of your tax bill.

Q: What does it mean to county governments and schools?

A: If the state's financial situation continues to deteriorate and the General Assembly is unable to honor the reimbursement, the county, school and cities will have to fund the cost of the credit out of their own budget or bill the taxpayer for a refund of the credit. If there is a shortfall, the decision as to how it might be handled will have to be made at that time by the governing authority.

Q: What happens next?

A: For the year 2008, the money to continue this grant was appropriated by the General Assembly. If it is their intention to honor the commitment, the General Assembly will have to counter the governor when they convene in January 2009. If they are not able to honor the commitment, a decision as to how to handle the shortfall will have to be made at that time.

Q: What is the immediate problem?

A: From what I have heard and read, Columbia County has no immediate problem. The Tax Commissioner's Office will be doing our part by living within our approved budget and doing our work, which is collecting and disbursing the $96 million that was billed on Aug. 8.