As the US election draws near, voters in multiple states have the power not only to elect public officials but also to determine the future of their property tax burdens. States like Georgia and North Dakota are at the forefront of this discussion, with ballot measures that could potentially reshape how property taxes are applied. These proposals, if passed, would give some homeowners relief from ever-increasing tax bills while shifting the tax burden in other ways.
Property tax measures on the ballot
With property tax rates becoming a contentious issue across the US, it’s no surprise that this election sees several states grappling with ways to alleviate the burden on homeowners. On November 5, voters in eight states will have the opportunity to vote on property tax measures that could reshape their financial responsibilities. The states include:
- Georgia
- North Dakota
- Florida
- Arizona
- Colorado
- Illinois
- New Mexico
- Wyoming
Each of these states is grappling with the same issue: rising property values leading to increased property tax bills. As housing demand outstrips supply nationwide, property values have skyrocketed. In states like Georgia, the total assessed value of property increased by nearly 39% from 2018 to 2022, with property tax collections rising by 41% in the same period. This trend has left many homeowners, especially those on fixed incomes or the elderly, struggling to keep up with their tax payments. For many voters, these ballot measures are seen as a potential lifeline.
Georgia’s property tax amendment
In Georgia, rising property values have caused property taxes to skyrocket, prompting lawmakers to propose a constitutional amendment. This measure would limit increases in property values for tax purposes to the rate of inflation each year, reducing the potential for substantial jumps in homeowners’ annual property tax bills. The amendment primarily targets primary residences, not second homes or commercial properties, and gives local governments the option to opt out if they prefer to control their own assessments.
Supporters of the amendment argue it will protect homeowners, particularly the elderly, from being taxed out of their homes due to rising property values. State Senate Finance Committee Chairman Chuck Hufstetler has referred to the unchecked increases as “a backdoor tax increase” that disproportionately affects those on fixed incomes.
There has been little opposition to the measure, with many early voters in Georgia expressing support. Brad Turney, a homeowner in Atlanta’s Midtown neighborhood, noted after casting his ballot that “I don’t want it to get out of hand, and I think this might be helpful.” However, some local officials, particularly in school districts, have raised concerns that capping property tax assessments could reduce funding for essential services like education.
If the amendment passes, it would take effect on January 1, 2025, with local governments having until March of that year to opt out. This short window for decision-making adds to the complexity of the measure, leaving some municipalities in a bind over whether to embrace the cap or risk losing crucial revenue.
Eliminating property taxes
While Georgia aims to cap property tax increases, North Dakota’s ballot measure takes a much more radical approach: eliminating property taxes altogether, except in cases where it is used to repay existing debts. If passed, North Dakota could become the first state in the US to abolish property taxes. Proponents of the initiative argue that the measure would provide immediate relief to homeowners, particularly in the face of increasing property assessments.
However, the proposal has raised significant concerns among both policymakers and economists. Many fear that eliminating property taxes, the largest source of local revenue in the state, could lead to a fiscal crisis. Local governments would still need to fund essential services, like schools, police, and fire departments, without a clear replacement for lost revenue. Critics argue that the state might have to raise other taxes, such as income or sales taxes, to cover the shortfall, which could end up being more harmful to the state’s economy
The debate over property taxes in North Dakota is especially poignant following the state’s largest tax cut in its history in 2023. Governor Doug Burgum signed a bill that provided tax credits for homeowners and slashed income tax rates, leaving some to question whether more tax cuts are truly necessary.
