Homeowners should begin preparing for increased property taxes to be billed during the next two years due to changes in state law, Decatur County Tax Commissioner Don Belcher said.

Belcher, whose office is in charge of collecting the ad valorem taxes levied by the state and local governments, explained that the state government currently won’t be able to fund its homeowner tax relief grants this year and likely not the next either.

In the past, the tax grants have been paid out to local governments, who in turn give credits to homeowners to lower the assessed value of their properties for tax purposes. The grants are separate from the statewide $2,000 homestead tax exemption, which will remain in effect. Additional homestead exemptions for senior citizens, disabled veterans and the surviving spouses of U.S. service members, peace officers and firefighters killed in the line of duty are also unaffected.

According to Belcher, the loss of the grants will mean a property tax increase of $165 to $200 on the 2009 tax bills that will be sent out this fall. Property taxes are normally due by Dec. 20 in Decatur County. Although the new state law forbids placement of a notice on each tax bill explaining the unavailability of the credits, Belcher said he encourages homeowners to start preparing for the increase.

“It’s unfortunate in slow economic times to have to deliver this message,” Belcher said in a news release. “But homeowners need to know so now they can plan accordingly with their household budgets or make sure that tax escrows are properly funded with their mortgage companies to handle the tax increase.”

The homeowner tax relief grants applied to 2008 tax bills just barely survived budget cuts made by the state government due to the current economic downturn. In February, Georgia Gov. Sonny Perdue signed a law that funded last year’s grants. However, the law that saved taxpayers from a second bill last year created new rules dictating the status of the homeowner’s tax relief grants in future years.

Under the new rules, the General Assembly may appropriate funds to provide homeowner tax relief grants to local governments, but only if the state’s estimated annual revenue increases by at least 3 percent plus the rate of inflation, as measured by the Consumer Price Index, a figure kept by the U.S. Department of Labor Statistics. The CPI tracks the average prices of common consumer goods.

The annual CPI average thus far in 2009 is 3.8 percent, meaning the state’s revenue would have to be increasing by about 7 percent in order for the homestead exemption to be included on this fall’s tax bills. However, according to April figures, the state’s annual revenue for its current fiscal year—which ends June 30—was actually decreasing by about 9.8 percent annually, when compared to the previous fiscal year.

A bill that would have actually increased the homestead tax exemption from $2,000 to $4,000 over two years was considered by both the Georgia House and Senate during the last legislative session, but it ultimately failed. The Association of County Commissioners of Georgia opposed the bill, stating its belief it would further reduce local governments’ revenue.

However, Perdue has publicly expressed concern that the homeowner tax relief grants, which cost the state $428 million last year, are used by county governments to fund spending without having to raise local property tax.

One bit of good news for property owners, homeowners or otherwise, is the legislature’s passage of a law that places a moratorium on increases to assessed property value, for both state and local property taxes.

In Decatur County, the moratorium will take effect during 2010.