During the 2024 legislative session, House Bill 581 passed unanimously in the state of Georgia with bipartisan support. The “Save Our Homes Act” will essentially cap the assessed value of your home to the rate of inflation, determined by the Department of Revenue. So, if you have seen your home assessment skyrocket by as much as 20% over the past few years, then your property taxes have been increasing, too. But the 2024 rate of inflation for the state has been around 2%, so instead of seeing that 20% increase, you would now only see a maximum of 2% increase, effectively lowering your property taxes thus, “saving our homes.”
I am a homeowner in Newton County, and if my assessed property value of $300,000 increased by 10% to $330,000, then I would pay roughly $430 per month in school taxes. In 2025, under HB 581, and assuming the rate of inflation at 2%, then my assessed property value could only increase 2% to $306,000, where I would pay $400 per month. Thanks to HB 581, my savings would be around $30 per month in school taxes.
It’s a good thing, but at what cost?
Credit: Contributed
Credit: Contributed
There are always unintended consequences of legislation, and it is not hard to miss the impact this will have on Georgia’s children.
Student achievement in Georgia public schools is on the rise. And while throwing money at a problem rarely solves it, removing funds when growth is occurring certainly does not help. With a statewide renewed focus on literacy and mathematics, the future is bright for the children in Georgia.
But the majority of funding for these children’s schools comes directly from local property taxes. In Newton County, with the passing of HB 581, the estimated loss of revenue is nearly $4 million in the first year, $6.2 million the next year and continues to rise in future years. How can a school system lose that amount of money and continue the trajectory of growth in student achievement, continue to make schools safer and pay its teachers a reasonable professional wage?
In the last eight years, the purchase price of school buses has increased 46%, the cost of diesel fuel has increased 30% and facility construction costs and staff health insurance premiums have doubled. Add in initiatives that the community demands, such as increased school safety measures, and you have an incredibly costly school system to operate.
Some have argued school systems have unnecessary spending and bloated budgets. But with personnel costs and salaries consuming 85%-90% of school system budgets, it’s hard for me to agree with overspending on our greatest assets, our teachers.
So, with a shortfall of $4 million, where will the lost revenue come from?
Many local governments have lowered their millage rates to try and offset the rise of property assessments to help alleviate the tax burden on homeowners. But there will be no way to continue lowering millage rates as operating costs continue to rise and funding continues to decline.
Increasing millage rates will greatly affect the nonhomestead property owners and local businesses, while also increasing the taxes on the intended beneficiaries of HB 581. As they say, there is no such thing as a tax break, just a tax shift. This doesn’t sound like a win for anyone.
If property assessments are capped, and if local boards keep their current millage rates, then the only way to balance school system budgets will be to reduce staff, increase class size and forego safety initiatives that our community has demanded. This will have a damning effect on student achievement.
Is there a way out?
There are potential solutions such as reevaluating the Quality Basic Education formula, which was created in 1985. Many education professionals would argue the 40-year-old formula is outdated and does not provide the necessary state funding for a “quality basic education” in 2025 with major advancements in educational technology and school safety concerns, along with their associated costs. Another potential solution could be for the legislators to use the enormous state “rainy-day fund” to offset the explosive health insurance premiums school boards are absorbing.
Thankfully in November, Georgia voters overwhelmingly approved House Resolution 1022 which allows local community governments to “opt-out” of HB 581 if the math doesn’t work in their community. By adding this resolution, it appears our state legislators do still believe in local control for public education, by shifting the decision to local boards along with the potential political fallout.
As an elected official, my desire is to represent the will of the people. And when homeowners are begging for some tax relief, and our legislators enact such laws, I desperately want a tax break for the people. But the implications are perilous for children in public schools in my community. Thus, the quandary of HB 581.
Do we accept the legislation as-is and take the financial hit crippling our school systems, or do we set aside ideological purity and opt-out of HB 581 for the sake of the future of our community: the voiceless and voteless children who so desperately need someone to fight for them. This is not an easy decision.
Homeowners, I ask for your thoughtful consideration: Is it is worth $30 a month in savings if the children and teachers in your community suffer?
And local school board members, I beckon you to dig deep into the financial ramifications of HB 581 and to weigh heavily the potential impact this can have on the children in your community. Each local board must decide for themselves if it is right for them to opt-out. But if the math just doesn’t add up, please be brave. Could this impact your ability to get reelected? Maybe. But could it impact children for years to come? Certainly.
We must think of the kids first, for what good is it to save our homes, yet lose our children.
Trey Bailey is in his eighth year on the Board of Education in Newton County. He co-hosts “The Town Square Podcast.”
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