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Published Saturday, August 30, 2008 in Local

Perdue puts brakes on $428M tax relief grant

By Sarah Fay Campbell

The Times-Herald

Because of the state budget crunch, Gov. Sonny Perdue has put the brakes on $428 million that is supposed to go to local governments as part of the Homeowners Tax Relief Grant.

Approximately $2 million of that amount should be budgeted for Coweta County, and some $4 million for the Coweta County School System.

On Tuesday, the Coweta County Board of Commissioners will discuss sending out a letter with property tax bills informing Cowetans it's possible that, in a few months, they'll be hit with another tax bill.

Losing the Homeowners Tax Relief Grant could mean an additional $250 to $350 in county taxes per home. The grant only applies to homestead properties.

Because the school system's share of taxes is roughly double the county's share, the increase in taxes would double, as well.

The governing authorities may be able to cut budgets to reduce some of the loss, but likely won't be able to cover all of it.

"The reality is, we've already set our millage rate, we've already got the tax digest approved," said Coweta County Administrator Theron Gay. And the budget is very close to being finalized.

"If it doesn't come back as a rebate, we're a couple of million short overall," Gay said.

The school board hasn't yet discussed what might happen if the grants don't come through, said Dean Jackson, public information officer for the school system.

"We're waiting until we get some word from the state and from the governor," Jackson said.

The governor can only hold the money for so long.

The actual decision will be made by the Georgia General Assembly when it adopts the supplemental budget for fiscal year 2009.

And though members of the General Assembly are rarely united on anything, many have come out in favor of the grant.

"We have a challenge right now in our budget, with revenues being low," said Sen. Mitch Seabaugh, R-Sharpsburg.

But "I will unequivocally say that the downturn in the economy was not brought on by the Homeowners Tax Relief Grant. I can see no scenario where I can see getting rid of it," he said.

"I personally am not interested in having to pay anywhere from $250 to $350 more in property taxes," Seabaugh said. "So I'm sure not going to vote to make anybody else have to pay that either."

"We made a commitment and we need to honor that commitment" to the local governments, Seabaugh said.

The revenue challenge "is about the state spending money in many areas where it shouldn't be spending money," Seabaugh said.

State Rep. Lynn Smith, R-Newnan, said the House Republican Caucus is in favor of the grant.

"That's not on the table for us," Smith said. "I know that is what the governor is putting out there. But the House is for protecting that."

Since he decided to hold onto the money, the governor has said the grant never did what it was supposed to do -- provide property tax relief.

Instead, Perdue said, local governments have taken the money and still grown their budgets.

Perdue even went so far to say that when it comes to budget crunches, local governments "have never approached it from the standpoint that they have to tighten their belts."

Gay took issue with Perdue's statement.

"I would say that the increases we have had through the years -- a lot of them have been attributed to state mandates," Gay said.

A good example is stormwater management. The multi-million dollar, state-mandated program was the major reason Coweta County had to raise taxes by an entire mill last year.

And it's not as if the county spends money willy-nilly.

"I would think that Coweta County has done very well. We rolled our millage rate back this year," Gay said.

"We've tried our very best to control spending. And we think we have managed it very well in a time of high growth here in the county."

The school system has been hit even harder.

"Over the last six years, we've had austerity cuts," Jackson said. The cuts began in fiscal year 2003 as a response to the economic downtown after Sept. 11, 2001.

Since then, the school system has missed out on a total of about $18 million, Jackson said. "We had several years where it was well over $3 million in cuts from the funding formula," he said. In more recent years, it's been around $1 million.

If the state doesn't release the grant, "not only would that be a significant cut, it would also come on top of those cuts that we're still bearing."

In dealing with the austerity cuts, the school system has simply absorbed most of them.

"We've done that by an awful lot of belt tightening," Jackson said. "We have frequently frozen spending. We've maintained the minimum pupil teacher ratios, but we haven't had the ratios that we've wanted."

There have also been electives that were cut.

"We have certainly done without a great deal in the school system that parents and the community would have liked," Jackson said.

Coweta's junior legislator, Rep. Billy Horne, R-Sharpsburg, thinks the governor may have a point. And he supports discussing the merits of continuing or discontinuing the grant in the future.

But it should definitely be given this year.

"I don't think it's fair to the counties, since this idea of holding it was floated so late in the game," Horne said. "It's not something they were prepared for. I think it is only fair that we keep it in place for now."

"And we may need to do it going forward, but it does need to be looked at going forward, to see if there is something else we can do to give homeowners a bit of a break on their taxes," Horne said.

Perdue "does have some very compelling evidence that the grant is not giving anybody any tax relief, which was the purpose in the first place," Horne said.

"There may be a better way to do it."