A state-imposed moratorium on raising property assessments will expire in January, though a renewed debate on the property tax system is likely.
In 2009, the Georgia General Assembly voted to put a three-year cap on assessed property values in response to the housing crisis.
That moratorium expires Jan. 9, making the 2011 tax year the last that local tax assessors cannot increase assessments. Property owners are taxed based on the assessed value of their property on Jan. 1 each year.
Edward Lindsey, majority whip of the Georgia House of Representatives, sponsored the 2009 bill that created the cap.
"By and large from what I'm hearing from folks around the state is that they're pleased we have it in place," Lindsey said. "I think the moratorium has helped. Unfortunately, many counties chose to try to figure out ways around it, sometimes stretching both the letter and the spirit of the law in doing so."
Senate Majority Leader Chip Rogers, R-Woodstock, sponsored the legislation in the Senate. Rogers said he thinks the moratorium just enforced that the majority of properties in the state have decreased in value over the past two years.
"I don't know that it's really had that much impact because property values have been going down, not up, so there would have been no justifiable reason for someone to be assessing a property at a higher value anyway," Rogers said.
Lindsey has prefiled legislation to change the property tax system in Georgia's Constitution.
"We are bringing back up again the proposed constitutional amendment that we pushed last session that would cap property tax reassessments at no more than 3 percent or the rate of inflation, whichever is less," Lindsey said. "The underlying principle behind it is that folks should be taxed based on their investment in their property, not on unrealized gain.
"At the same time, we'll be looking at ways to reform the assessment system."
Clint Mueller, the legislative director for the Association County Commissioners of Georgia, the lobbying organization for Georgia's counties, said capping property values long term would hurt local governments.
"We're having some counties that are having double digit declines in their tax digest," Mueller said. "When we return to times where values start going up again, those caps keep you from ever making up those losses."
And if the tax digest remains too low, local governments will have to increase their millage rates to generate enough revenue to keep up their operations.
"It's going to make our tax rates look artificially high because we have artificially low property values," Mueller said. "That's one of the long-term potential effects of this type of legislation."
Hall County's Interim Chief Assessor Don Elrod said he thinks capping property values isn't fair.
He said he has recently seen lake front and commercial properties selling for more than the county's assessed value.
"I'm kind of seeing fewer foreclosures come through and we still have individual sales at our values or above in a lot of cases," Elrod said.
Assistant Hall County Administrator Phil Sutton said he understands the assessors' concerns.
"Whenever you freeze their ability to reassess, whether it's up or down, it can cause property values to be improperly set, so there's some winners and losers in that," Sutton said. "If some folks are more favorably treated because their property assessment should go up, but it can't because of the law, then everybody else is going to pay, in theory, a little bit more because the property assessment has been held down artificially in some cases."
Rogers also sponsored Senate Bill 346, which made several changes to the property tax system and takes effect in January.
"From my standpoint, the property tax system needs to be done away with. It is an antiquated system based on an agrarian economy where a person's wealth was determined by how much they could grow on their property, not on the value of their home," Rogers said. "It has so many problems with it. It's an inefficient system for raising taxes. But if we're going to accept the notion that someone should pay a tax based on the fair market value of their property then it needs to be the fair market value of their property, not a made up value by a government employee."