A statewide floating homestead exemption (HB581) was recently passed and signed into law. The law creates a statewide floating homestead exemption which has a direct impact on school districts by setting a state-determined inflationary cap on homestead property tax assessments. The cap is projected to be around 3% per year. The law gives schools systems, county commissions, and municipalities a one-time opportunity to opt-out of the law.
“We all would appreciate property tax relief on our homes, however there are always unintended consequences when we give up local control of our own revenue sources,” stated Superintendent Mike Roberts. “Had this law been enacted in 2024, the school system would have lost approximately $473,000 in property tax revenue. This in turn would have reduced our state earnings (QBE + Equalization) by over a million dollars. This equates to a loss of about 14 teaching positions for Heard County Schools. The law provides no new way for school systems to replace this lost revenue” explained Roberts.
What happens if revenue constraints are not keeping pace with the costs of services or if the statewide inflation is not reflective of the local housing market? The unintended consequences of the floating homestead exemption could cause millage rates to rise on all properties including farms, rental properties, commercial, etc. that are not covered under the inflationary cap each year, causing these non-homestead property owners to pay more in the long term.
NOT opting out will result in a school board yielding all local control, thus eliminating the local board’s ability to analyze annually whether to adjust the millage rate or use the rollback rate. Although 2024 saw significant increases in assessed property values, Heard County taxpayers would have been forced to pay even more in property tax had this law been enacted prior to 2023. This is because the local tax digest would have increased by less than the state inflation rate. The Homestead Exemption creates an assessed value cap that would likely create disparities between assessed values and market values with newer or recently sold properties paying a more significant share of the property tax burden. “I believe we should opt-out of this legislation while we have the opportunity. This will afford us a few years to study the unintended consequences on all Heard County citizens had we not opted out. We can always opt-in to the inflationary formula down the road if it is working well across the state as intended,” stated Roberts.
The school board will hold public hearings at 131 East Court Square in Franklin, GA at the following dates and times:
January 17 th 9:00 a.m. and 1:00 p.m.
January 28 th 7:00 p.m.
