Dear Editor,
Local governments and school officials seem prepared to eliminate a major property tax cut for county homeowners. All have issued public notices that allow them to “opt out” or avoid implementing House Bill 581. This new state law limits annual increases in the taxable value of homes to the rate of inflation, which in 2024 was 2.9 %. So, instead of the unpredictable and unfair tax assessments that have increased dramatically in recent years, properties with homestead exemptions would go up only at the rate of inflation.
A majority (about 60%) of Newton County voters thought that HB 581 was a great idea when we voted to implement it in November 2024. However, the potential loss of millions of dollars in property tax revenue has caused legitimate concern among local government and school officials. But, predictions by local officials themselves show that the loss may be only a small percentage of their total budgets. For example, Newton County officials estimated that if HB 581 had been in effect from fiscal years 2022 to 2024, the county would have lost $17.6 million in revenue. That sounds terrible but would have been only 4.7% of the total county budgets for those years.
The impact on the school system budget is also predicted to be in the millions- $11.7 million by FY 2029. But that will be less than a 4% reduction in a school budget that could total about $330 million by that time.
The county, our cities and our school system all have other sources of revenue to support their operations. Those funds, if strategically applied, could make up any loss in property taxes. There are sources like state and federal funds, ESPLOST, SPLOST, impact fees, water revenue, utility fees, etc. that could offset any reduction in the tax digest caused by HB 581.
Local governments can also raise their millage rates to offset any reduction in the tax digest caused by HB 581. That process is open to public input each year so citizens have a voice in that decision but almost none in how homestead property tax assessments are determined. HB 581 addresses that issue by stabilizing annual increases at the rate of inflation.
Also, HB 581 allows local governments to hold a future referendum to increase local sales tax up to another cent if needed to make up revenue losses. Yes, that is
a shift in taxation, but the financial impact is spread over the entire population of a county and not limited to homeowners.
What can voters do regarding the decision local government and school officials will make about HB 581? If we do nothing, we may lose out on the largest property tax reduction in recent memory. To have a voice in this decision, we must contact our local officials and show up at the public hearings each government entity is required to hold before opting out of HB 581. The schedule for those hearings is currently being advertised in this newspaper and others.
Larry McSwain
