A taxing path to cost-of-living relief
Leadership in the Georgia General Assembly has been crystal clear about their top priority: Easing the pain of price inflation. At first blush, this seems like a bipartisan issue since affordability affects all stripes of voters. But apparently reaching consensus on how to accomplish that goal is no easy feat.
At the top of the list is House Resolution 1114, sponsored by Rep. Shaw Blackmon, R-Bonaire, and co-sponsored by Speaker of the House Jon Burns. At first, it was intended to empower voters to amend the constitution to gradually phase out the homestead property tax entirely. This would have made homeownership and life in general more affordable.
There is also a deeper philosophical argument against such property taxes. Do you even truly own your property if you must pay the government for that privilege each year? Speaker Burns made his opinion known, stating, “Georgia House Republicans believe no one should ever face the loss of their home because they can’t afford to pay rent to the government.”
That aside, there was plenty of opposition to the tax plan. Property taxes levied at the local level help fund a host of works and services, like schools, which we all find important. However, the plan was to slowly eliminate property taxes to give locals time to implement new ways of funding government services.
This was a bridge too far for some lawmakers and lobbyists who raised the alarm and formed an imposing wall of opposition. So Blackmon pivoted and re-worked the proposal to hopefully appease naysayers while still benefiting Georgians. The most recent iteration would have left property taxes in place but reduced them moderately over time.
It would have done so “by reducing the taxable assessed value of residential properties from 40 percent of appraised value to 10 percent of appraised value at the rate of 3 percent each year,” reads the legislation. While this was a retreat of sorts, it would have still represented a victory for homeowners.
“We’ve all received emails from constituents worried their property tax bills will force them from their homes,” Blackmon explained, but this was not enough. After the House vote on the resolution concluded, the clerk reported 99 yeas to 73 nays. Despite garnering a simple majority, this was a failure. Measures to amend the constitution require a House supermajority or 120 yeas.
Fresh off the heels of this vote, the rebukes came flying, including one from the Speaker’s Chief of Staff Chris Riley. He tweeted a screen shot of a local tax relief bill sponsored by some representatives who opposed HR 1114. In that tweet, he remarked, “This is a new tactic; dropping legislation to provide tax relief for homeowners in your district the same day you vote against it statewide.” Ouch.
All hope is not lost. The House managed to pass a bill to gradually reduce the income tax rate from 4.99% to 3.99% and a pared down measure that may reduce the property tax burden. The Senate, meanwhile, has been busy with one of its own proposals. Instead of addressing property taxes via a constitutional amendment, Sen. Blake Tillery, R-Vidalia, introduced legislation to eliminate the state income tax for all Georgians earning $50,000 or less and for households making $100,000 or less.
In support of his bill, Tillery said, “Let’s use the fact that we’ve been the most attractive state, use that as an ability to reduce the income tax rate for those Georgians, hardworking Georgians who are filling those jobs. They’re calling on us. They’re telling us that they’re having a hard time paying for gas, groceries, and child care. And if we don’t listen to them, why are we here?”
Despite his persuasive presentation, the debate over his bill was heated. Some members understandably questioned how they could replace revenue lost from the income tax, which represents about half of the state’s income. Others tried to say that this would destroy Georgia’s economy because within the bill were provisions to eliminate sweetheart tax credits on various industries, including out-of-state film companies.
It’s a bit rich for legislators to fight for non-Georgian companies to enjoy massive tax discounts and then refuse to extend those benefits to Georgians, but never mind that. Eventually, Tillery’s legislation received a highly contested vote and passed the Senate 32 yeas to 18 nays, but its ratification is not a foregone conclusion. The House still must consider it, and its path forward appears dubious.
Georgia’s legislative session will adjourn in less than a month, but that can be an eternity under the Gold Dome where dead bills are sometimes resurrected at the 11th hour. For the time being, Georgians should be pleased that lawmakers clearly recognize that affordability matters, but without consensus, the solutions are uncertain, especially when many do not consider eliminating certain taxes an option.