Preheat oven to 400 degrees F. Spray a 9x13-inch baking dish with nonstick cooking spray; set aside.
Scrub then dry potatoes and cut into thin 1⁄8” slices; set aside.
Add milk, garlic, salt, pepper, thyme and nutmeg to a saucepan over medium-high heat. Bring to a boil then add butter and whisk together until butter is completely melted; remove from heat and set aside.
Arrange half the potatoes in an even layer in prepared baking dish. Top with 1⁄2 cup shredded cheddar cheese and 1⁄4 cup grated parmesan cheese. Repeat layers again then pour milk mixture over the top of potatoes.
Bake, uncovered, for 40 minutes or until potatoes are tender and golden brown.