ATLANTA - Gov. Sonny Perdue said Tuesday that homeowner tax grants have helped fatten local government coffers but have been "ineffective" in driving Georgia's property taxes down.
Perdue has frozen the $428 million in grants that had been set to go out this year as the state scrambles to close a budget shortfall. He said Tuesday he'd like to see the grants - which local officials say average about $200 to $300 per household - scrapped altogether.
"I think there are better ways to help our local citizens reduce the growth of property taxes," Perdue said following a news conference to promote the Atlanta Motor Speedway.
Local officials protested that eliminating the grants would hit homeowners when they can least afford it. Local governments would have to boost taxes to make up for the missing state money.
"If the governor is trying to raise local property taxes this certainly would be the way to do it," Amy Henderson, spokeswoman for the Georgia Municipal Association, said.
The tax relief grants are provided to local governments and passed along to homeowners as a tax credit. The grants, adopted by Democratic Gov. Roy Barnes, are one area state official are eyeing as they look to slash about $1.6 billion from the state budget. Facing a sluggish economy, state tax collections in Georgia have slowed to a trickle.
Perdue is likely to face stiff opposition from state lawmakers who fear elimination of the grants could push property taxes higher in a year when they had pledged to lower them.
"We want to keep them," House Rules Committee Chairman Earl Ehrhart, R-Powder Springs, said. "We agree that there is a problem with the growth of local government but they (the grants) are tax relief for homeowners."
Lt. Gov. Casey Cagle, who presides over the state Senate, echoed that sentiment.
"We need to keep his grant intact so that Georgia's homeowners are not affected any further in this current economy," Cagle said.
Perdue on Tuesday acknowledged that the issue is "politically nuclear" for legislators who, unlike him, are facing re-election this fall.
But he said the growth of local governments has been "overwhelming," far surpassing the rise in state government. His office released several pages of documents charting the increase.
He said local property taxes have continued to rise and the state grants are simply being used to expand local government.
Local officials acknowledged their costs are growing but said that's because their populations are. With that has come an increase in demand for services like trash collection, schools and police.
And unlike the state, local officials say they have nowhere else to turn to pay their bills.
"We're the service provider of last resort," Clint Mueller of the Association of County Commissioners of Georgia said. "There's no place for us to shift our costs."
