In what many legislative leaders are referring to as “the biggest property tax increase in Georgia history,” Governor Sonny Perdue’s 2009 budget proposal includes eliminating state funding for Homestead Exemption Grants, which would force county tax commissioners across the state, including Troup and Meriwether counties, to send out additional bills for 2008 taxes to Georgia homeowners. This cut could also push local school boards to raise property taxes to make up the difference to cover its education funding formula, since the state does not cover it.

Gov. Perdue gave his annual State of the State and budget address on Jan. 14 before a joint session of the General Assembly. With revenue down $2.2 billion from last year because of the economic crisis there wasn’t much good news to spread around. The 2009 supplemental budget, which runs until June 30, is going from $21.2 billion to $19.2 billion and the 2010 “big” budget that begins July 1st of this year is $20.2 billion. To stimulate growth, the Governor is proposing $1.2 billion in bonds for new construction projects throughout the state which is expected to create 20,000 jobs.

To help offset the shortfall, the governor is dipping into the state’s rainy day fund to the tune of $50 million for the 2009 budget and $408 million for the 2010 spending plan. He also proposes a 1.6 percent fee on hospitals and providers to help shore up the shortfall in Medicaid and provide $60 million for much needed trauma care funding.

Controversy is swirling over the omission of the $428 million homestead property tax relief grants that go to local governments and are passed on to homeowners. Estimates show this could increase property taxes for homeowners as much as $300 and would be the largest property tax increase in Georgia history. Under the governor’s plan, teachers and other state employees would go without a pay increase. Also, funding for school nurses and supplements to teachers who receive national board certification would be eliminated.

Basic state funding for public schools would be cut by $185.8 million this year and $197 million in FY 2010, shifting those costs to local property taxpayers and bringing the eight-year total of education tax shifts under this administration to more than $2 billion. To offset that Republicans are touting a constitutional amendment that would cap property tax assessments for residential properties at 2 percent and 3 percent for commercial properties. But local governments say they would have to raise property taxes to make up for the loss in revenue or slash existing services such a police patrols or trash pick up if this cap were enacted.

Transportation is another hot button issue because there is no plan coming from the Governor this year. For years Georgians have been stuck in traffic while we failed to adopt any meaningful transportation measure to end gridlock. Last year legislation died on the very last day session because Republicans couldn’t agree on a bill that would have provided a much needed funding source for roads, highways and mass transportation. It would have allowed regions to band together, and after voter approval, raise revenue to fund their priority transportation projects. The legislation was carefully crafted and had the support of a wide range of influential groups such as the Georgia Chamber of Commerce. But infighting and squabbling led to its defeat and Georgia remains stalled while our neighboring states are moving forward with bold transportation initiatives. As always, if I can be of service or if you are scheduled to visit your State Capitol, feel free to contact me at 404 656 7859.