Savannah Morning News

Chatham County officials are on high alert after Gov. Sonny Perdue announced last week he was suspending more than $8.6 million in state revenue disbursements.
Those funds are part of $428 million owed to local governments for underwriting a state homestead exemption on property taxes.

"We are analyzing it right now," said County Manager Russ Abolt. "This could have extreme consequences."

One of those consequences likely will not be billing homeowners to make up the difference, at least one county official said.

Perdue announced Friday that the state would be withholding the disbursements in the wake of a projected $1.6 billion state deficit.

The payouts would have reimbursed local governments for funding the state's homeowner tax-relief credit, which provides tax relief on homeowners' county, school, state and city property taxes.
Chatham County's largest recipient is the Savannah-Chatham school system, which is supposed to get about $4.6 million this year.

The county is supposed to receive about $4 million. Amounts for 2008 for Savannah, Thunderbolt, Tybee Island and the west Chatham municipalities were not available on Wednesday.

The suspension is coming at a difficult time, said County Commissioner Helen Stone. The county is facing decreased property tax revenue growth, rising health insurance costs and an expected increase in the cost of maintaining and operating the county jail after the planned expansion, Stone said. At the same time, residents are facing rising gas and grocery prices, she said.

"These are the type of things you have to keep an eye on," she said. "It is really important you don't wait until the legislative session."

Perdue is authorized to suspend the funds until the General Assembly meets in January, said Bert Brantley, Perdue's press secretary.

The governor can then recommend that legislators eliminate the reimbursement, but Perdue has not decided whether he plans to do so, Brantley said.

"We have a long way to go before now and January," Brantley said. "There is plenty of time to see what the economy looks like."

The Association County Commissioners of Georgia is recommending affected parties continue to include the exemption in this year's tax bill, said Michele NeSmith, ACCG research and policy development director. House and Senate leaders have stated their support for the reimbursements, NeSmith said.

If that is the case, Chatham County's financial situation should not be jeopardized, said Pete Liakakis, commission chairman. The county typically receives the reimbursement sometime between October and December, and the budget should be able to withstand the delay, Liakakis said.

If the money is not reimbursed, the county could be left figuring out how to make up the difference.

Half of the tax relief credits have already been included in the tax bills sent in May, said Daniel T. Powers, county tax commissioner.

Chatham County sends out tax bills in two installments. The remaining credits are set to be included with the second bill in September, Powers said.

The tax credit saves typical homeowners about $180 to $200 on average, Powers said.
Powers said he cannot imagine legislators would eliminate the reimbursement. It would be extremely difficult to go back and bill everyone to make up the difference, Powers said.

"That would be something short of a nightmare and I'm not sure if it is legal," he said. "That is another issue that has to be explored."