"A New Development in the Tax Debate, Casey Cagle Style"
The Cut Waste initiative and website were created in an effort to improve state government. In that light, we share this story from today's InsiderAdvantage Georgia, highlighting Lt. Governor Cagle's efforts to increase the homestead exemption and provide necessary tax relief to Georgia homeowners during these challenging economic times.
Meanwhile, A New Development in the Tax Debate, Casey Cagle Style
1/30/2009
The tax story keeps unfolding piecemeal in the Georgia Legislature, and Lt. Gov. Casey Cagle has just thrown in another piece.
He told reporters Thursday at his weekly briefing he is working towards legislation that would increase the homestead exemption -- the real one, not the pretend one used for the current homeowner tax relief grants -- as a step to shield homeowners if the current tax relief grants are ended.
As you know from our previous story today, the House will vote Friday on measures which would:
Continue the homeowner grants for the current year but make them subject to a revenue test in the future that puts their continuation after that in doubt. The immediate impact is to protect homeowners from receiving $200 and $300 tax bills from their local governments for relief that was granted last year under the program but never funded by the state.
Limit assessment increases on residential and commercial property so that local governments which needed new revenue would have to vote publicly for tax hikes rather than relying on assessment creep to generate fresh cash.
The current homeowner relief program is a convoluted system in which local governments pretend that the $2,000 homestead exemption provided by law is actually an $8,000 exemption, and the state pays the difference -- some $428 million a year.
But that pretend exemption will go away under the action currently contemplated by the governor and under the proposed legislation.
Cagle told reporters his legislation, designed to work more or less in tandem with the House measures, would at least double the real homestead exemption from $2,000 to $4,000.
He said the measure limiting assessment increases, going before the House on Friday, will give homeowners "predictability in their property tax by knowing what the assessed values are going to from one year to the next."
Coupling that with a doubling of the homestead exemption from $2,000 to $4,000 "would reduce their tax burden, as well."
The state would not fund the increased homestead exemption that Cagle proposes. Instead, it would come out of local government revenues. Local governments that were hard pressed would be required to increase taxes, Cagle acknowledged, but he said a front--end tax hike is preferable to back--door increases through assessment creep.
The increased homestead exemption does not require a constitutional amendment, but it does require a statewide referendum. Cagle said he is examining whether that referendum can be scheduled in 2009, alongside municipal elections, rather than waiting an additional year.
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