COVINGTON, Ga. – The city of Covington has declared that they will remain opted in to House Bill 581 (HB581).

The decision comes following a 15-minute deliberation at Monday’s work session before the regular called meeting. All six council members were unanimous in their decision to remain in the bill, with Mayor Fleeta Baggett declaring the city would remain opted in.

HB581 was a ballot measure across the state of Georgia in the November 2024 election. Also known as the “Save the Homes Act,” the bill was passed by the General Assembly last year and passed with nearly 60 percent voter approval in Newton County. The bill at its core is designed to be a floating homestead exemption designed to give property owners relief on their property taxes. An opt-out provision was added in the bill that allows local governmental entities to opt out of the bill by March 1. While other entities in the county are considering opting out due to the potential loss of property tax revenue, the potential adverse effects of the bill may not be as drastic for the city of Covington.

City Attorney Frank Turner Jr. said that Covington would not be impacted as heavily as smaller municipalities due to the many moving parts throughout the city.

“The impact on a city like Covington is significantly less than it would be [than] if you look at some of our smaller municipalities that owner-occupied housing is pretty much their only source of revenue,” Turner said. “I mean, we have industrial, we have commercial, the majority of our houses are rental and they’re not impacted by this.”

According to the city’s Fiscal Year 2024 (FY24) financial report, Covington generated $8.1 million in total property tax revenue this past fiscal year. This accounts for approximately 14 percent of the city’s revenue, per page 10 of the city of Covington’s citizens financial report.

In a discussion on whether or not the loss in property tax revenue could impact the millage rate in future years, Baggett said it would be “very slim” due to the enterprise funds from the city.

Council member Susie Keck called the city’s situation “unusual,” but noted that opting in would likely be best for Covington.

“If we indeed opt in, I see the benefit for our few property owners and we’re still gonna get revenue increase by all the new houses we see,” Keck said. “And every time a house sells, it will be reappraised. So I see this as a great opportunity to help our residents.”

Council Member Travis Moore, who attended the meeting virtually, wanted to know if opting in would impact any of the city’s big projects such as the Floyd Street Infrastructure Replacement Project before making his decision. Finance Director Randy Smith said that the estimated revenue loss due to property taxes would be “at most” $48,000, stating it would not likely have an impact on any special projects.

Council Member Kim Johnson said that her position on the bill would be to side with the voters.

“If the people voted and that’s what the majority wants, and we’re not gonna go under as a city, then I would vote [to] opt in,” Johnson said.

All six council members then agreed to opt-in, with Baggett making the formal declaration following the consensus.

“The city of Covington will be opting in,” Baggett said.

Covington now joins the city of Mansfield as the two known entities that have confirmed their intentions to opt in to HB581. As it stands, it appears likely that the Newton County Board of Commissioners will opt in as well, though no formal decision has been made available.

If all other governmental entities decide to opt in, then voters can enact a one-percent FLOST sales tax for five years that can recoup some of the lost property tax revenue.

However, it does not seem likely that a FLOST will be implemented in Newton County, as the city of Oxford, the city of Social Circle and the town of Newborn are all holding the three law-required public hearings to consider opting out of the bill. 

The Newton County Board of Education has also leaned toward opting out, though that does not impact a potential FLOST.

Following the three public hearings, an entity can vote to pass a resolution to opt out with a majority vote. As of this writing, no entity has formally opted out. 

Editor's Note: The city of Covington has previously placed a required advertisement with The Covington News that schedules three public hearings on Feb. 10 and Feb. 17, respectively, announcing the city’s intent to opt out. However, due to the city’s decision to opt in, those public hearings will no longer take place.