Supporters say the new law will prevent local governments from hiking assessments during an economic downturn that has driven many property values down. But critics say it could lead counties and cities to boost millage rates instead, meaning tax bills will rise either way.
The new law applies to commercial and residential properties and becomes effective immediately. The moratorium applies to tax bills for 2009-2011. Assessments can go down during that period meaning foreclosures and the depressed real estate may still cause some property values to dip.
"We've got a real estate meltdown in this state that is helping to fuel an economic downturn," the bill's sponsor, state Rep. Ed Lindsey, R-Atlanta, said. "This provides some stability."
But Clint Mueller, legislative affairs director for the Association County Commissioners of Georgia, said the new law could have "a chilling effect" on reassessing properties generally. Cash-strapped counties could forgo hiring costly outside contractors to perform reassessments if they know it will only drive their revenues down, he said. That could lead values to remain stagnant, even in cases where they should decrease.
Property taxes were a hot topic at the state Capitol during the legislative session that concluded in April. But Lindsey's bill was one of the few measures to win approval. Georgia Republicans had pushed for a constitutional amendment that would have limited to 3 percent the amount by which residential assessments can rise every year. The bill fell short of winning the needed two-thirds majority in the House. GOP leaders are expected to try to push the measure through again next year.
Lindsey said he fully expected that, without the ability to raise revenue from rising home assessments, some counties would hike their millage rates instead.
"But it forces local governments to deal with taxpayers honestly and transparently and if they are going to raise taxes they are going to have to look taxpayers straight in the eye and say so," he said.