The Georgia House of Representatives unanimously supported a reduction in income and property taxes - WABE

Governor Brian Kemp and state leaders announced a one-time supplemental payment for state employees, public school teachers and staff, and employees of the University System of Georgia at the Atlanta State Capitol Building on Monday, December 18, 2023.

Last week, the Georgian House passed laws to reduce income tax and local property taxes, supporting the priorities of Governor Brian Kemp and House Speaker John Burns. The laws will accelerate the already planned income tax reduction, increase tax benefits for homeowners in certain areas, and raise the amount that parents can deduct for each child from their annual income tax.

Tax cuts in election years are always popular among Republicans, and this year all 236 seats in the House and Senate are up for grabs. Although the growth of state tax revenues is slowing down, Georgia can afford tax cuts because the state has planned to spend much less than it collects in taxes and had $10.7 billion in unspent funds at the end of the last budget year.

Representatives voted 165-0 in favor of passing House Bill 1015, sending it to the Senate for discussion. Kemp and other Republican leaders support the measure to reduce the state income tax rate to 5.39%, retroactive to January 1. Since that date, Georgia has had a flat income tax rate of 5.49%, established under the 2022 law that eliminated several tax rates that reached as high as 5.75%.

The income tax rate should decrease by 0.1% annually until it reaches 4.99%, provided that the state's revenues remain at the same level. The plan to reduce the rate from 5.49% to 5.39%, announced in December, will require an additional $300 million. This is in addition to the $800 million that the state is expected to lose due to an earlier tax cut.

Representatives also voted 165-0 in favor of adopting House Bill 1021, which will increase the amount taxpayers can deduct for dependents from $3,000 to $4,000.

"With the rising cost of groceries, child care costs and many other things that parents are responsible for, this will prove again that Georgia residents are looking for pro-family policies and we are leading the way," said Rep. Lauren Daniel of Locust Grove Republican.

The chamber also voted 162-0 in favor of passing Bill 1021, which will reduce local property taxes for some homeowners. To pass the law in the Senate, a two-thirds majority will be required, and then it must be approved by voters in a referendum in November.

The measure will increase the state tax exemption for homes from the current $2,000 to $4,000. Representative Matt Reeves from Duluth, a Republican, stated that this will save homeowners $100 a year in taxes to local governments and schools. "This will provide good tax relief at a time when it is needed for people to be able to purchase their first home here in Georgia," Reeves said.

However, this measure will not be applied in all areas. Some counties have local legislation regarding property tax exemptions that does not allow for the addition of state exemptions on top of local ones. It is unclear how many homeowners will be affected by the measure, but House Republicans estimate that it will save homeowners across the state at least $100 million a year.

Senators are likely to propose a plan that will limit the rate at which the assessed value of property can increase for tax purposes, which may restrict future property tax hikes.