By Don McKee
Columnist
It's that time of year again when, as a New York legislator said 143 years ago, "No man's life, liberty or property is safe while the legislature is in session."
The Georgia General Assembly convenes today amid conflicting pressures for raising or cutting taxes as state revenues decline along with the economy.
On the positive side, there may be a good chance the lawmakers will act to curb property tax reassessments.
Rep. Edward Lindsey, a Buckhead Republican, proposes a constitutional amendment to put a cap on assessments, an especially welcome move at a time when real estate values are declining.
It's bad enough that reassessments can jump when property values increase, but when they drop it's even worse because taxes do not come down. It's a one-way street.
A fact that has received far too little attention in the past is the basic inequity of reassessments: they amount to a tax on profits not realized. That puts real estate, including homes, in a special punitive tax class.
If you invest in a stock, there's no tax due until the stock is sold. Then you pay the capital gains tax on the profit realized on the sale but you don't pay taxes every year on the value of the stock regardless of how much the price increases.
Real estate taxes are totally different. You pay taxes every year based on the appraised market value of the property - and then if you sell the property you also have to pay capital gains tax on the profit.
Rep. Lindsey said it comes down to fairness, sort of an oxymoron when it comes to real estate taxes. Property owners that hold property for years keep paying taxes on values they never realize - year after year.
Lindsey's proposal is, appropriately enough, House Resolution 1. It would freeze the assessed value of real property for ad valorem tax purposes at the 2010 level. And it would limit the assessed valuation during a taxable year to "the lesser of 3 percent or the percent change in the rate of economic inflation."
It is co-sponsored by House majority leader Rep. Jerry Keen (R-St. Simons), enhancing prospects for enactment in some form.
Another tax reform measure, HR 2, is sponsored by a Democrat, Rep. Kevin Levitas of Atlanta. It calls for a constitutional amendment to provide for "base-value exemptions" from property taxes, effectively freezing the taxes subject to local voter approval.
On the other side of the coin, Rep. Ron Stephens (R-Savannah) proposes legislation to raise the state tax on tobacco.
Every year tobacco takes 10,300 lives in Georgia, he said in a news release. And "tobacco-related disease costs Georgia $2.25 billion in direct health care costs each year."
Enactment of his bill would give us the best of both worlds. Stephens points out that the legislation would "increase state revenues and decrease state health care expenditures." Maybe.
Meanwhile, keep a close eye on what happens under the Gold Dome.
dmckee9613@aol.com
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Posted Comments
Beware! Freezing assessments does not mean your taxes are frozen. All the County Commissioners have to do is raise the millage rate(and they will if they feel the need). Don't thinkg that freezing your property assessment will accomplish anything. It might mean that you could lay off a few assessors but that's about it.
Of course, limiting reassessment would be nice - however, cities and counties will only raise the millage rate in order to get more money. I always loved it when Marietta and Cobb County would say there would be no tax increase, but your tax bill would be up. Checking with the tax office they would tell you that taxes didn't go up, just the milleage. You are absolutly right Mr. Jones. And as for raising tobacco taxes, woldn't it have been nice if the millions received by the state during Gov. Barnes term had been used for something - anything- that had to do with tobacco, smoking, etc rather than new band uniforms and covered bridges. It should have been used for state paid stop smoking aids. And would have been if anyone in the capitol had been serious about the dangers of smoking. Me thinks thou doth protest too much!!!