Officials in Norcross, Sandy Springs, and cities across Georgia are warning that the state legislature’s plan to phase out homestead property taxes would strip away the revenue that pays for police, parks, and paving.
At the Sept. 15 Sandy Springs State of the City, Mayor Rusty Paul said the Georgia General Assembly “doing away with” taxes on primary residences would cut a third of the city’s revenue, essentially “defunding” public safety departments.
“There is one threat on the horizon that I want to talk about … it’s a tough subject because it sounds so attractive,” Paul said. “You’ve got to understand what the ramifications are … I’m all in favor of doing away with homestead property taxes as long as the legislature will allow us to have alternative forms of revenue.”
Working with legislature
Paul, former chair of the Georgia Republican Party, said cities, counties, and school districts need a plan to recoup revenue if property taxes on homesteads are removed. He said he does not think a one-penny sales tax will do it.
“They’re saying you can just simply shift the tax burden from homesteads to commercial property,” Paul said. “How many of you are paying rent already more than you think you should be paying? I’m not a big fan of shifting the tax burden to the business community.”
Paul said Sandy Springs would cut staff members, free community celebrations, and nonprofit subsidies before taking away resources from the fire and police departments.
“When you cut a third of our revenue without giving us the ability to replace it, those are the things we have to start contemplating,” Paul said. “I want ot thank Shea Roberts because she was a stalwart down at the state Capitol this past year, helping make that point to the majority party, which I am a member … some days. It’s going to force very difficult decisions on us.”
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• Norcross City Council discusses state legislation affecting property taxes
Sandy Springs officials continue to work with the Georgia Municipal Association on a solution. Paul said he’ll be watching the General Assembly when it convenes for its annual 40-day session in January.
The senior homestead exemption in Sandy Springs only applies to the school district, not the county or city government. Fulton County Schools is preparing to raise its millage rate in response.
Sandy Springs legislator chimes in
The state legislature failed to overhaul how state and local governments get their revenue, though some will see revenues flatten next year. The Senate did not eliminate the state income tax, and the House did not pass its deepest cuts to local property taxes.
State Rep. Shea Roberts (D-District 52), representing most of the Central Perimeter district and surrounding neighborhoods, said City Manager Eden Freeman crunched the numbers showing the impact on Sandy Springs services.
“It caused the legislators to go back and make [the bill] a little bit better,” Roberts said after the address. “It’s still not good for Sandy Springs. It was nice to be able to work with my community and on the same side, trying to make sure we have what we need.”
Senate Bill 33 created a one-penny sales tax starting in 2028, called the Local Homestead Option Sales Tax, intended to provide property tax relief for primary residence owners. The bill also caps annual taxable value increases for homestead properties at the inflation rate beginning next year. Previously, local taxing jurisdiction could opt out, but no more.
“It’s coming back,” Paul. “And they are determined; they want to do this again. It’s a threat not just to Sandy Springs … every city from Atlanta to the smallest little town.”
She said Paul is right about city revenue, which she described as a three-legged stool.
“We’ve got to figure it out,” Roberts said. “You can’t take one leg out from underneath it without replacing it with something else.”
