A property tax freeze for low-income Athenians may be coming soon — but there’s a catch

Houston Gaines (R)

UPDATE 4/1/21: This bill (HB 797) did not pass.

UPDATE 11/8/2022: HB 797 passed in 2022 and was approved by the voters overwhelmingly in a referendum.

State Representatives Houston Gaines and Marcus Wiedower released a bill this week to double the size of Athens’ property tax homestead exemption and freeze property taxes for those living at or under 150% of the federal poverty level.

The ACC Commission requested the low-income property tax freeze from the state legislature last year and it appears they will pass it in the final days of this year’s legislative session. Despite being dropped at the last minute, the Atlanta Journal-Constitution gives it a 76% chance of passing

Commissioner Tim Denson
Commissioner Tim Denson

The low-income property tax freeze would be a major victory for progressives who have championed such a policy for years, particularly Commissioner Tim Denson, who drafted this part of the bill originally, and Mayor Kelly Girtz who championed the idea during his last campaign. In a comment to APN, Denson said he is “thrilled” to see the tax freeze included in the bill, a change which he says could fight gentrification and help prevent Athens’ rapid growth from harming low-income residents.

The idea has been broadly popular among progressives and conservatives alike with some version of the plan floating around for years. For example, former Mayor Nancy Denson also campaigned on a version of this idea. Although hers focused on age instead of income, the concept is essentially the same — to help people living on a fixed income stay in their homes as property values continue to rise around them.

Be careful what you wish for (you just might get it)

But the low-income tax freeze isn’t the only thing in Gaines’ and Wiedower’s bill (HB 797).

HB 797 also doubles the size of Athens’ already huge homestead exemption, causing it to balloon from $10,000 to an incredible $20,000, a number which Denson called “ridiculously high.” For comparison, Oconee county’s homestead exemption is a mere $2,000, the same as in both Jackson and Madison county.

The homestead exemption is subtracted from the value of owner-occupied homes when determining how much is due in taxes every year. This would reduce the amount the ACC government is able to collect in taxes.

Denson questioned why Gaines and Wiedower weren’t focusing on the smaller homestead exemptions of some neighboring counties instead, saying, “it shocks me that they aren’t working to double or triple the homestead exemptions there, counties which they represent, to bring them up to what Athens-Clarke county currently has,” Denson said.

Mayor Kelly Girtz
Mayor Kelly Girtz

According to Mayor Kelly Girtz, the doubled homestead exemption would drain over $2 million yearly from the local government’s budget. Yet, it could have an even bigger financial impact on the ACC Board of Education, which already has tax rates set at the maximum legal amount. While the ACC Unified Government would be allowed to raise taxes to compensate for the lost revenue, the board of education would not.

Fortunately, it appears that the bill as currently drafted may not apply to education taxes, only to the local government.

Instead of raising tax rates, Girtz might choose to cut expenditures instead, should HB 797 pass. In a letter to Athens’ local legislative delegation, Girtz strongly opposed the bill, saying it may prevent him from boosting the pay of police officers, something he currently plans to do in his next budget. Likewise, Girtz wrote that the bill puts four mental health co-responder teams for ACCPD at risk, which would suddenly require a new source of funding.

A referendum on the horizon

Assuming HB 797 passes the legislature, it would require a vote of Athens-Clarke County residents before it could go into effect. The bill specifies a referendum on May 24, 2022 where voters will decide if they want to lower their taxes or not.

While some patriotic Athenians may want even more of their money going to fund necessary programs in our community, it seems likely that most people will choose to cut their own taxes when given that option. In fact, this bill could truly be a lifeline for thousands of low or medium-income homeowners struggling to stay in their homes as property values in Athens continue to go through the roof. 

The low-income tax freeze would have the further benefit of making property taxes in Athens more progressive. Right now, the state government refuses to allow local governments to raise money from residents in a progressive way; property and sales taxes are the only options, but they are both regressive, falling harder on the poor than on the middle-class and wealthy. The low-income tax freeze, if implemented, would help low-income property owners immediately and could be a foot in the door to create an even more progressive property tax system going forward.

Denson says he will celebrate the policy if passed by voters, saying that the low-income tax freeze is “desperately needed.” But he also says that he will work to “make up the loss of revenue where we need to, to continue providing our community with high quality services,” indicating that a yes vote may force the ACC government to raise tax rates.

By the way, Houston Gaines might run for Congress

If HB 797 is passed and approved by citizens in the referendum, it will cause financial difficulty for the ACC government. At the same time, it will undoubtedly be extremely popular with voters across the political spectrum.

With Jody Hice, Athens’ representative in Congress, running for Georgia Secretary of State, his current seat in US district 10 will be vacant. Rumors are already circulating that Houston Gaines is planning to run for Hice’s seat.

If Gaines does run for Congress, he’ll surely get a boost to his primary campaign due to HB 797, which adds to his small government, anti-tax bona fides.  

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