Letter to the Editor

House Bill 581, part of Georgia’s 2024 statewide referendum, introduces changes to property tax laws by limiting yearly increases in property tax assessments for homeowners who qualify for a homestead exemption. It sets a cap on annual increases in assessed home values, tying them to the inflation rate.

The bill was created to ease the burden of rising property taxes caused by rapidly increasing home values, offering long-term relief to homeowners. However, local governments, such as school boards, have raised concerns about the cap’s potential to limit revenue growth, especially in growing communities.

Approved by voters in the November 2024 general election, HB581 is set to take effect in 2025. Local governments and school districts each have the option to opt out by following specific procedures by March 1, 2025. This process includes holding three public hearings to gather feedback from the community about the advantages and disadvantages of HB581.

State lawmakers have prioritized local control by allowing districts a one-time opportunity to opt out. This means school boards and other local governments can choose to continue collecting tax revenue without any caps. The opt-out process begins on January 1, 2025, and must be finalized by March 1, 2025. The decision is permanent and will have long-term consequences.

When evaluating this option, the local board of education carefully weighed the proposed advantages and disadvantages of HB581. Supporters of HB581 highlight its benefits for homeowners, particularly in preventing sudden spikes in property taxes as property values rise. They argue the bill provides meaningful tax relief and aligns with the wishes of voters who approved the referendum. Opting out, they caution, could face public backlash since the measure was already supported statewide.

On the other hand, critics, including some school boards, warn that HB581 could harm local revenue and education funding. By capping property tax increases, the bill may limit schools’ ability to raise the funds needed to meet rising costs, leading to potential budget shortfalls. Retaining local control allows school boards to adjust tax rates to fit their community’s specific needs—something a statewide cap does not accommodate.

Unlike county commissions or city councils, the legislation does not allow school boards to implement an additional local option sales taxes (LOST) to offset operational costs. Additionally, school boards are required to contribute a portion of their local revenue to the state through the five-mill share (LFS). In Emanuel County, one mill generates about $685,000, the LFS obligation will increase as property values rise. However, HB581 restricts the county’s ability to collect revenue locally, creating a gap. The state calculates the LFS based on the full property digest, while local revenue is limited by the capped digest—an imbalance that favors the state.

Emanuel County Schools has consistently prioritized keeping taxes as low as possible for local taxpayers. Over the past five years, we have demonstrated this commitment by taking a full rollback on the millage rate, placing our district’s millage rate among the lowest 10% in Georgia. Another critical source of funding for schools in our state is equalization funding, which requires an equalized millage rate of 14 mills. While most school districts maintain a 14-mill rate to ensure they receive this funding, Emanuel County Schools have reduced the millage rate each year since 2020. With each rollback since 2020, we have put receipt of these funds to chance.

After reviewing the information available on this legislation, the Emanuel County Board of Education is considering utilizing this one-time opportunity to opt out of HB581. To do so, procedures require us to declare an intent to opt-out. This decision to consider this option did not come easily but was made to ensure the board retains control over tax revenue decisions. The Board of Education hopes to continue to offer homeowners tax relief through a low millage rate, when local budget and economic growth make it feasible.

Sincerely,

Del Brown, Board Chair

Emanuel County Board of Education

John Allen Bailey, Board Vice Chair

Emanuel County Board of Education