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Bill Proposes Reduced Property Taxes In Georgia; Schools Maintaining Eligibility For State Funds

Bill Proposes Reduced Property Taxes In Georgia; Schools Maintaining Eligibility For State Funds

Property tax rates may be reduced in certain Georgia school districts under a House proposal that would allow districts with low property wealth to still receive state help even if they lower property tax rates.

On Tuesday, the House approved House Bill 987 by a vote of 161-12, and it will now proceed to the Senate for further discussion.

The proposal would allow districts to reduce their minimum property tax rate from 14 mills to 10 mills and still be eligible for state equalization subsidies.

Rep. John Corbett, a Republican from Lake Park, stated that this bill could reduce property taxes for several Georgia citizens statewide.

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It is one of several initiatives that Georgia lawmakers are contemplating this year to lower property tax costs. The House also aims to raise the statewide homestead tax exemption, reducing property tax expenditures for homeowners in select counties. On the other hand, the Senate aims to restrict the future growth of homeowner property values used for tax assessment. Senators believe that this action could reduce future rises in property tax bills.

Some school districts have informed residents that they are unable to lower tax rates due to increasing property values, as doing so would exclude them from receiving substantial equalization funds.

Georgia is allocating $756 million in equalization money this year, permitting districts to utilize their portion at their discretion. The funds are intended to ensure that districts with little taxable property nevertheless receive sufficient funding to educate pupils. Nicholas Warner, a scholar at Georgia State University, discovered in a 2019 study that the southeastern districts of the state had historically received the highest benefits.

Three Tax Relief Measures Arrive in Georgia

The equalization scheme commenced in 1987 with a modest mandatory tax rate and governmental expenditure of $84 million. Lawmakers revised the program due to increasing costs and stagnating state tax collections. Starting in 2019, districts must levy property taxes at 14 mills or higher to be eligible to participate.

That requirement conflicts with another objective of Republican lawmakers, which is to keep overall tax revenue constant by reducing tax rates when property prices increase.

Rep. Chas Cannon, the Moultrie Republican proposing the bill, stated that some school systems in the state are choosing to maintain the mandatory rate of 14 mills to avoid jeopardizing their equalization, while having the option to decrease it. “By doing this, they are transferring considerable property tax hikes to their residents annually.”

Property tax collections in Georgia increased by 41% from 2018 to 2022, according to statistics. Within that timeframe, the overall assessed value of properties across the state increased by almost 39%. The Georgia Department of Revenue data encompass both current property and newly constructed buildings. The increase in appraisals on existing property is not clearly specified.

Cannon’s bill proposes to decrease the equalization funds allocated to districts that fall below the 10-mill threshold for the first time. Those districts are set to have a 25% reduction in their equalization funds in the upcoming year.

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