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ASK THE EXPERTS

No place to hide when taxes go up

POSTED: July 22, 2009 4:00 a.m.

I’ve written about my aversion to backdoor property tax increases since before I was first elected to the Legislature in 2000.

  

Backdoor tax increases occur when the value of your property continues to rise, while at the same time elected officials representing the taxing authorities (school boards, counties, cities) blame tax increases on increased value without having to raise millage rates. For many years it’s been the perfect cover. 

  

Well, that cover was lifted this year. The 2009 Legislature enacted HB 233, a two-year freeze on the increase in property values until we can work out a long-term solution to the backdoor tax increase problem. Tax appeal boards have even been instructed to factor in any decrease in property values where proven in the current economy. This puts an additional strain on school boards, counties and cities whose revenues are experiencing unusual shortfalls.

  

If taxing authorities need to raise revenue from property taxes now, they have to raise the millage rate. That’s not a popular way to get re-elected. 

  

What’s been the response of some taxing authorities to the new realities of raising your property taxes to provide enough revenue to pay for necessary government services? 

  

Unfortunately, some look for a scapegoat to blame.

  

Lately, that scapegoat seems to be senior citizens and the permanently disabled. 

  

Did you know that most school boards, counties and cities in Georgia have had some form of Senior Citizen Homestead Exemption for years? It’s only one of several Homestead Exemptions available to those who qualify for them.

  

A check around the state shows that most Senior Citizen Homestead

  

Exemptions are even more generous than ours locally.

  

Conservation Use Covenants are another form of tax relief and a tax shift from those who qualify to those who do not qualify. There are Conservation Use Covenants on more than 30 percent of the tax parcels in Lumpkin County.

  

Some local taxing authorities wrongly say that they will lose tax revenue when Senior Citizen Homestead Exemptions are implemented. No Homestead Exemption causes any taxing authority to lose any revenue. 

  

I say again, “No Homestead Exemption causes any taxing authority to lose any revenue.” 

  

Taxing authorities set their own budgets and their own millage rates. All Homestead Exemptions are a tax shift from those who qualify to those who do not qualify. They are not a tax loss to the taxman. The taxman usually gets what he budgets.

  

In Lumpkin and Dawson counties, senior citizens age 65 and over and those permanently disabled account for about 15 percent of the property owners. Why do these Homestead Exemption referendums regularly pass by more than 70 percent? It looks to me like a whole lot of people under age 65 and those not permanently disabled have voted for this significant tax relief legislation.  

  

As taxing authorities continue to work on their 2010 budgets this summer, you will hear more about this. Public hearings are required when taxing authorities raise your property taxes more than the state mandated roll back. I encourage you to get involved and attend these meetings.

  

Raising your taxes during a severe recession is not the answer. When property taxes go up for 2010, there will be no place for elected officials to hide.

  

Now let’s take a look at what’s happening with the state budget. The June revenue figures are in and they don’t look good. Tax revenue for June 2009 was down 15.7 percent from June of 2008, which was down 9.4 percent from June of 2007. This recession is in its third year and getting worse.

  

In January 2008, Georgia had $1.6 billion in reserve, and some educators were accusing us of hoarding money. The reserve is down to $200 million, which will be used in the next session for the midterm adjustments required by law. You might as well say we have used up all of the reserve. Without that $1.6 billion in reserve, we might have been issuing IOUs like California and watching our AAA bond rating declining to a B rating.

  

During the 2008 Session of the General Assembly, we set the FY 2009 Budget at $21.6 billion. During the 2009 Session, we amended that budget to $19.2 billion and established the FY 2010 Budget at $18.6 billion. With less than a month into the new fiscal year, we are already $600 million in the hole. The revenue is down 15 percent and declining.   

  

In a recent state-wide poll of registered voters, one of the questions asked was whether government should raise taxes or cut spending. Overwhelmingly, 62 percent of Republicans and 60 percent of Democrats, the respondents said “don’t raise my taxes.”  As a state, Georgia ranks 49th in spending per capita.

  

Only Ohio spends less.

  

Rep. Amos Amerson can be reached at 689 N. Chestatee Street, Dahlonega, GA 30533; (706) 864-6589; e-mail hamerson@windstream.net.

 

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