Cherokee County Schools face $58M revenue loss due to tax exemption policies

Cherokee County School District faces a significant financial challenge, with projected revenue losses of over $58 million in the next three years due to changes in property tax assessments. During a public hearing on February 13, 2025, school board officials outlined the implications of the Georgia Department of Revenue's decision to set the inflation factor at zero for 2025, which will directly impact the district's funding.

The current inflation rate in Georgia stands at 2.9%, while the real estate market is growing at 5.6%. This discrepancy means that Cherokee County schools could see a revenue drop of approximately $10.6 million in fiscal year 2026 alone, compounding to $28.4 million by 2028 if trends continue. The board emphasized that this loss would necessitate either permanent reductions in services or an increase in the maintenance and operations millage rate to offset the deficit.

In response to these financial pressures, the school board has taken proactive measures over the past three years, reducing the tax burden on residents by more than $52 million. Notably, they were the only district in Georgia to cut the millage rate by 1.5 mills, saving taxpayers $23 million annually. Additionally, the board has paid off bonds early, resulting in further savings.

The discussion also highlighted the recent expansion of a local homestead exemption for senior citizens, which eliminates school taxes for homeowners aged 62 and older, costing the district an estimated $13.9 million annually. This exemption is part of a broader strategy to support the community while managing the district's budget.

As the board navigates these financial challenges, the implications of the statewide floating homestead exemption, authorized by House Bill 581, remain a critical point of discussion. This exemption, separate from the senior exemption, is expected to further impact the district's revenue, emphasizing the need for careful financial planning moving forward.