Opinion Columns & Blogs

Property tax burden hitting hard in Georgia

A burgeoning property-tax revolt in Fulton County ended with the county’s quick surrender. That doesn’t mean the issue is over, for Georgia’s largest county or the state as a whole. Fulton homeowners were outraged in May when new assessments started showing up in their mailboxes. Half of homeowners saw increases of at least 20 percent, almost a quarter of them at least 50 percent. (A personal note: Mine rose by 147 percent.) After the Board of Assessors refused to throw out the new tax digest, the county commissioners cited an obscure state law in freezing the digest at its 2016 level.

That came as a relief to many of us, albeit a temporary one. This year’s soaring assessments represent a systemic problem for a tax that wasn’t built for the kind of real estate market that has developed in many parts of metro Atlanta and perhaps other Georgia cities.

Only the property tax raises your tax burden because of financial decisions others made (your neighbors paying more for their homes) and your unrealized financial gains (you don’t pay capital gains tax on a stock until you sell it). It might also be the biggest part of your non-federal tax burden, depending on your home’s value relative to your income.

All of that might be tolerable if the market rises slowly and steadily. But in red-hot markets, double-digit annual increases can pile up quickly. A particularly pernicious cycle exists in the continuing wake of the Great Recession: The supply of homes remains abnormally tight, sending prices higher than they’d otherwise go, leading to a disproportionate impact on county assessments.

Without a brake on homeowners’ tax bills — and no millage-rate rollback will keep up with assessments rising by 50 percent or more — counties could drive homeowners to sell solely to avoid an unaffordable tax bill. Conservatives, having long warned against letting government policies drive decisions in the marketplace, should want to prevent that. So should liberals who rightly worry about the impact of gentrification on housing affordability.

Faced with soaring tax bills, homeowners naturally lose faith in the system. “They intuitively realize, I didn’t consume more (public) services,” says Jan Jones, a Milton Republican and the second-ranking member of the state House. “When I bought this house, I agreed I would pay taxes on that amount, and could afford them, and that was a reasonable bargain for the services I received.”

But a spike in assessments like the one in Fulton this year, she says, is “frightening for retirees on a fixed income, and it’s frightening for young families.”

Jones says she is working on legislation to address the problem, perhaps by adjusting homestead exemptions to rise in proportion to increases in assessments until houses are re-sold. Another option is to cap the assessment increase that can be levied in a single year.

Whether that is done only for Fulton or for the whole state remains to be seen. “I’ll be looking statewide, but it’ll be bottom-up,” depending on what she hears from other legislators, Jones says. “I want to be thoughtful about any statewide changes that probably would require a constitutional amendment. The good news is (an amendment) would only pass the Legislature if it was broadly supported, which would be indicative of pervasive problems and a pervasive lack of confidence in the (assessors’) results.”

The lack of confidence is real enough in Fulton, at least. Expect this to be an issue under the Gold Dome come January.

Kyle Wingfield writes for The Atlanta Journal-Constitution. Reach him and read more at www.bit.ly/KyleWingfield.