State tax grant likely to be rarer

Changes in a state law granting tax relief to Georgia homeowners could mean the grant will not be offered as often in the future.

The Homeowner Tax Relief Grant, in effect since 1999, uses state funds to offset residential property taxes in cities and counties.

Georgia lawmakers this year eliminated the grant to save more than $400 million in an already stunted budget. In the future, they will dole out the grant only in years when state revenues grow by 3 percent above inflation over their level the last time it was awarded.

If that formula was applied to the past decade, homeowners would have received the grant only in 2000, 2001, 2006 and 2007, instead of every year, according to Chattanooga Times Free Press calculations.

The grant became a hot issue this year after Peach State residents received property tax bills without the offsetting grant. In Catoosa County, the increase is about $177 for homeowners in unincorporated areas, $198 in Ringgold and $228 in Fort Oglethorpe.

In Whitfield County, "your taxes are not going up, but the check you write is going to be (about) $160 more than it was last year," said County Commission Chairman Mike Babb.

Lawmakers had authorized the grant every year since 1999 until House Bill 143 this year tied it to revenue. Based on historical state revenue data, requiring growth of 3 percent over inflation compared with the most recent grant year might mean more years with no grant.

If revenues lag for a few years and no grant is awarded, accumulated inflation could add up and make it more difficult to qualify for the grant even when revenues increase, data show.

State Rep. Tom Dickson, R-Cohutta, said the formula may not be popular when it keeps the state from issuing the grant, but he urged residents to look at the big picture.

"If you look at it strictly from a local taxpayer's perspective, any kind of tax relief is a good thing," Rep. Dickson said. "On the other side, if there's not state funds to cover it, you're going to have to make choices."

He also said legislators will reassess the law in the next few years to be sure the criteria are reasonable.

Sen. Jeff Mullis, R-Chickamauga, said the state could "easily" hit the mark.

"Georgia's had some great growth years, it just hasn't been recently," he said.

He acknowledged that the grant almost certainly won't return next year, but if the economy roars back, the growth criteria will be easier to reach because the state is starting from a low point.

"As low as I think the economy has fallen off the cliff, in the future we could have great growth," he said.

Rep. Jay Neal, R-LaFayette, was a little more hesitant.

"We want to do it as often as we can, but what we don't want to do is get in a position where we were coming into 2009 where we faced (budget) cuts of nearly $2 billion," he said. "It's hard to know what to expect from the economy."