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Assessment freezes kick off tax reform debate

ATLANTA - What is likely to become a sticky debate over taxes in the General Assembly began smoothly Tuesday when the Senate approved two tax reform proposals in under 30 minutes.

"Welcome to tax reform," declared Senate President Pro Tempore Eric Johnson, chief sponsor of one of the measures. "This is the beginning of what everybody anticipated heading into this session."

Both proposals, which passed overwhelmingly, would freeze property assessments to prevent local governments from reaping revenue windfalls by ordering revaluations.

The legislation introduced by Johnson, R-Savannah, would be limited to residential property. The second proposal, sponsored by Sen. Chip Rogers, R-Woodstock, would apply to all types of property.

The two represent the first tax measures to clear either legislative chamber during the current session, which started about a month ago.

Still in the pipeline are two proposals backed by Gov. Sonny Perdue to eliminate the state portion of property taxes and abolish taxes on upper-income retirees and House Speaker Glenn Richardson's plan to do away with school property taxes.

Johnson's legislation would extend statewide a property assessment already in effect in his home county of Chatham and about three dozen other cities and counties across Georgia.

It would freeze assessments on all residential property until they are sold, unless the owner undertakes an addition or improvement that requires a building permit.

As long as a property remains in the hands of the same owner, its assessed value for tax purposes could only increase at the rate of inflation.

Johnson said the freeze would force local governments seeking additional tax revenue to raise millage rates rather than through the "back-door" avenue of revaluating properties and taxing homeowners based on the resulting higher values.

"We're trying to stop a system that allows local governments to act like Pontius Pilate and wash their hands of (tax increases)," he said.

After passing Johnson's proposal 53-3, senators turned to the Rogers legislation, which would freeze assessments on all types of property at this year's levels.

Going forward, it would allow the value of residential properties to increase by no more than 2 percent a year. Nonresidential property values could rise by up to 3 percent annually.

"We're bringing predictability to property tax bills," Rogers said.

Sen. Nan Orrock, D-Atlanta, one of seven senators who voted against the proposal, complained that freezing property assessments would represent partial tax reform at best.

She said both Johnson's and Rogers' measures would affect local governments' budgets but not the state budget.

"This is people moving pieces around the board, but it's not a comprehensive approach," Orrock said.

The next stop for the two measures will be the House.

As constitutional amendments, both eventually would have to pass muster with Georgia voters before becoming law.