About 50 people braved chill conditions to attend Augusta’s second hearing on House Bill 581 Tuesday.
The city is having the hearings because it’s considering “opting out” of the bill, which creates an additional “floating” homestead exemption for homeowners and lets governments use a sales tax to replace lost funds.
The break limits tax increases to the rate of inflation, rather than allowing the government to collect extra revenue due to property reassessments, but goes away when a home sells to a new owner.
The city’s message has been the exemption will constitute a “tax shift” as the government inevitably raises the millage rate on commercial property owners to make up for revenue lost to homeowners. A third hearing is scheduled for Feb. 18.
“There is no new money to the county. It’s just shifting from somewhere else,” said Interim Finance Director Tim Schroer.
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Sue Parr, speaking on behalf of the Augusta Metro Chamber of Commerce, said the chamber’s position is to opt out.
Only 38% of Augusta properties are homesteaded, meaning 62% will shoulder any increases the government levies to make up revenue lost to the exemption, she said.
“The city still needs what it needs to operate and we all want that,” she said. But meanwhile, “businesses are having a difficult time” and non-exempt landlords will pass the burden on to renters, she said.
The sales tax, meanwhile, is “regressive,” in that the poorest tend to pay the most, Parr said. Augusta taxes are already at 8.5%, a half-cent from the state’s cap of 9%.
A handful of attendees spoke about the bill. Some appeared to favor opting out. Landlord Annette Drowlette said she hasn’t raised the rent in years.
“This is going to force me to raise the rent,” Drowlette said.
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Resident Alicia James asked if anyone in the crowd supported not opting out. Several hands went up, but James said she supported opting out. Not opting out might save homeowners now, she said, but it will cost them when they sell their homes, she said.
“Opting in, we’re subject to sending Richmond County into a depression down the road,” she said.
Another resident who serves on the Board of Equalization said Augusta should form a committee to formulate its own approach to property tax relief.
Asked what they plan to do with the bill, Augusta elected officials present appeared to support opting out.
“There’s too many unanswered questions about this thing,” Commissioner Wayne Guilfoyle said. “Once we opt in, we can’t opt out.”
“Like they said, the money’s just going to shuffle,” Commissioner Tina Slendak said. “I think we need to do what we can to keep our commercial operations strong in this county.”
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Administrator Tameka Allen said few governments are opting in, but those that are tend to have residential growth Augusta doesn’t have.
Mayor Garnett Johnson said Augusta is trailing area counties in new home construction, with fewer than 250 last year. Aiken County had in excess of 1,200, while Columbia County had more than 800, he said.
Johnson said Augusta needs to maintain a strong small business community.
“I”m not going to vote to disadvantage commercial property owners… to where they go to a neighboring county,” he said.
HB 581 Public Hearing Presentation by Susan McCord on Scribd
