Property tax debate sharpens

ATLANTA --- The ongoing debate over Georgia property taxes has put the spotlight on some legislative give and take: Lawmakers want to give some tax breaks, but have set the stage to take away another.

The House voted 110-63 for a plan Thursday that would immediately freeze taxable property value increases for two years. The vote came days after the Senate adopted a measure that would double the statewide homestead exemption. Both measures could cut property taxes.

But lawmakers have also signed off on a plan that could scrap a state-funded property tax break worth about $200 to $300 per household.

The give-and-take highlights the tough decisions facing a GOP-controlled Legislature determined to cut taxes but also struggling to slash $2.2 billion in state spending as it faces a recession-driven revenue crunch. More than four hours of debate and two dozen speakers Thursday only sharpened the conflict.

Lawmakers who have unsuccessfully sought a freeze for the past four years said it would help lower taxes on homeowners while preventing local governments from raising revenues through a "back door."

"We will slam shut the process of backdoor tax increases once and for all that have made property taxes the most hated form of taxes to our constituents," said Republican state Rep. Ed Lindsey, the measure's sponsor.

He and his supporters faced fierce criticism from opponents who say slowing the growth of property taxes could deprive local governments of revenue to support crucial services such as police protection and education.

"This has nothing to do with backdoor taxes," said state Rep. Calvin Smyre, D-Columbus. "What this really will do is strangle and cripple our local governments. And every one of you in here knows that."

House leaders initially pushed the plan as a constitutional amendment aimed at slowing the growth of assessments to 3 percent each year. But after that failed to get the two-thirds support it needed, they instead went to a backup plan.

The new proposal, which needed only a simple majority, calls for a two-year freeze on property assessment increases. It would exempt recently sold homes, new homes or homes with new additions from the moratorium. It also doesn't bar decreases in assessed values.

The plan now goes to the Senate, whose GOP leaders have generally welcomed similar tax-cutting proposals. Senate Majority Leader Chip Rogers, who backs a plan to boost the statewide homestead exemption from $2,000 to $4,000, said he hopes to make property tax cuts a top goal. A homestead exemption effectively reduces the taxable value of a home.

Meanwhile, the fate of a $428 million property tax break hangs in limbo.

Gov. Sonny Perdue eliminated the Homeowner Tax Relief Grant from this year's proposed budget, but lawmakers from both parties quickly pledged to restore the tax break this year -- with a catch. The grant would be tied to the state's economic health in future years, meaning it is unlikely to be offered in the current recession.