A bill to cap annual property tax increases was approved in a recent Alabama House committee meeting. House Bill 73 aims to limit yearly tax hikes by imposing restrictions on annual property assessments. Currently, no cap governs how much an individual’s property taxes may escalate from one year to the next. Pettus previously highlighted to Alabama Daily News that significant property tax increases are a considerable concern for constituents.

Introduced by Rep. Phillip Pettus, R-Killen, House Bill 73 seeks to restrain yearly tax hikes by imposing limits on annual property assessments. Presently, no such restriction exists on the extent to which an individual’s property taxes can escalate from one year to the next.
Earlier discussions with Alabama Daily News revealed Pettus’s acknowledgment of constituents’ concerns regarding significant property tax increases.

As per the committee’s approval, the bill proposes a 5% annual cap on tax increases for Class III properties (encompassing single-family homes and agricultural land) and Class II properties (encompassing commercial and business properties).

However, organizations representing local governments and public education express apprehension regarding potential reductions in funding for their respective entities. Pettus has been engaged in discussions with these groups recently, with ongoing efforts to reach a consensus before presenting the bill for floor debate.

A fiscal analysis of the bill estimates a reduction in revenue for state and local governments and schools by approximately $67 million annually.

Sonny Brasfield, the executive director of the Association of County Commissions of Alabama, informed the committee that the bill would be prepared for consideration in the House with further amendments.

Notably, the proposed caps would not apply to properties that have never undergone assessment, those with substantial improvements, such as new constructions, or those subject to changes in ownership. The bill garnered support from over 20 co-sponsors. Additionally, Sen. David Sessions, R-Grand Bay, is sponsoring a similar version of the bill in the Senate, boasting 25 co-sponsors.