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Council hears state legislative update on House Bill 1116 property-tax provisions
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Summary
Councilor Peppers briefed the council on House Bill 1116 (Homeownership Market Equalization Act of 2026), which would cap local property-tax revenue increases at 3% (or CPI) and create a local homestead-offset sales tax option; he cautioned about implications for bond ratings and noted the bill requires mailed notice to taxpayers before hearings that would exceed the rollback rate.
Mister Peppers (speaker 11) gave a legislative briefing on House Bill 1116, the Homeownership Market Equalization Act of 2026, and outlined how it could affect Canton and other local governments.
Peppers summarized the bill’s core provisions: it would restrict local governments from adopting budgets that increase property-tax revenue by more than 3% or the rate of inflation (CPI), whichever is greater, over the previous year's rollback rate, unless overridden by a local act of the General Assembly or a voter referendum. The bill would also create a new local-option homestead-offset sales tax (LHOST) that could raise local sales taxes up to 5% in some jurisdictions to offset lost property-tax revenue; Peppers explained some Metro Atlanta communities would be excluded from certain provisions.
He said the bill would require local governments to mail direct notice to every taxpayer at least 10 days before any public hearing where they intend to exceed the rollback rate—changing current newspaper-notice practice—and would allow an advisory, nonbinding referendum. Peppers also warned of possible bond-rating impacts: “If this passes, it'll be a hard time seeing any local government receive ... a bond rating, and many local governments could be downgraded,” he said, noting that could increase borrowing costs.
Council members discussed implications for municipal services, sales-tax offsets, and how fire taxes or municipal bond obligations would be handled under the proposed rules. Peppers said the city will continue to monitor the legislation and provide updates as more information becomes available.
