For the past 15 years, local elected officials have been able to reap revenue windfalls while boasting they cut taxes.

State lawmakers hoped last week to end that practice, when the Georgia House passed a provision to cap the growth in property assessments. The cap, included in a bill that would eliminate the car tag tax, followed a failed attempt to limit the revenue growth of local governments. On Wednesday, a Senate committee removed the tag tax from the House resolution, but it passed the rest of the measure — including the cap on property assessments — on to the full Senate.

Lawmakers say they hope to insert honesty into a system that has allowed for back-door tax hikes through ever-rising appraisals. If it passes the Senate and wins approval from voters in November, residential assessment increases would be set at no more than 2 percent a year. Commercial values could rise no more than 3 percent annually.

"If local officials want to raise taxes, they should have to do it openly and honestly," Speaker Pro Tem Mark Burkhalter said. "We are trying to control the growth in local government spending, which has grown beyond any reasonable test in the economy or the population. We are trying to give predictability to taxpayers on their future increases."

Local governments set their budgets based on the services they want to provide. Then, officials set a tax rate to cover that spending. If assessments rise, as they typically do, local officials can roll back the tax rate some but still increase collections.

As a result, many individual property owners end up paying higher taxes while commissioners, council members and school board officials can say they cut taxes.

Both legislative proposals, as well as others targeting local taxes, have angered county and city officials about state attempts to take over control of the cash flow and limit the services of local governments.

"We pride ourselves in Decatur of giving people services they ask for," Decatur Mayor Bill Floyd said. "Everybody seems to be fighting against us. It's just really frustrating. I don't see much happening [at the General Assembly] I can be proud of."

Floyd called both ideas "as liberal as can be," because they extend state control over local government operations.

"They are not cutting their taxes," Floyd said. "They are cutting ours."

The assessment cap could force city, school and county officials to do something regularly that most of them never have had to do — raise the tax rate to get more money.

Fulton County Commissioner Robb Pitts, who has been in a county or city elected office the past three decades, said he voted to raise tax rates just once or twice during that time.

Local governments, Pitts argued, cannot take any funding cuts without compromising services.

"This is really infuriating to local officials," he said. "[Legislators] say: 'We are the good guys by capping your assessments. It's those bad local folks who are raising your taxes.' "

The situation is particularly difficult for school systems, because the state constitution sets a 20-mill limit on their taxation authority. Any school that reaches the cap could find its cash flow strangled.

Gwinnett school officials, who lead Georgia's largest public system, discussed tax-cutting bills during a meeting with teachers last week. Superintendent J. Alvin Wilbanks said the district could lose about $40 million through the House bill that would eliminate property taxes on cars. While lawmakers say the state will reimburse the money, there is no guarantee, he said.

"You have to question their support for public education," Wilbanks said. "It's not what you tell me, it's what you do."

School board member Robert McClure has been a loud critic of the Legislature. McClure said legislators expect local schools to teach at a higher level but provide less money to reach that goal.

"It's interesting that the people who claim to be interested in public education are starving us to death at the same time," McClure said.

Capping the growth of assessments would return Georgia to a system lawmakers outlawed 20 years ago. Then, most counties did not revalue all parcels annually, with the result that revaluations were performed unevenly. Often, the state applied a blanket increase to the entire tax digest of a county to make up for its failure to reassess.

That system allowed for modest annual changes but did not reflect fairly the true values for many properties. Some values that should have dropped rose anyway. Others that rose a small percentage should have climbed dramatically.

Most counties were short of the state constitutional requirement that all properties be assessed at 40 percent of fair market value.

Several counties already have local bills that raise homestead exemptions to match the growth in the digest, which limits how much money a local government can take in without raising tax rates.

Cobb County Commission Chairman Sam Olens, who already operates under such a floating homestead, said he supports the cap on assessments.

He predicted that if times get tough, counties will begin to cut subsidies for state services such as indigent defense, health care and family and children's services.

"My concern," Olens said, "is the overall feeling that the state does everything right and local government does everything wrong."

— Staff writer Laura Diamond contributed to this article.