Commission weighs bringing back homestead freeze, HB581 implications and millage cap language

Stonecrest Charter Commission members discussed whether to revive a city homestead assessment freeze that expired after taxable year 2019, and considered the local implications of state House Bill 581 and DeKalb County’s recent decision to opt in to the law.

Commissioners reviewed section 5.08 of the charter (homestead exemptions) and section 1.03 paragraph 37(a) (a 3.35‑mill cap on ad valorem taxes). They noted that a homestead freeze in the charter had protected homeowners’ taxable assessed values during the city’s early transition years (2017–2019) and that the freeze provision currently sunsets, so it no longer applies to taxable years 2020 and later unless revived.

Several commissioners raised HB 581 (referred to in the meeting as “H B 5 81”), explaining that the bill creates a new local sales tax option (a floating local option sales tax or “FLOST” in discussion) and caps county total sales tax at 8 percent, which could affect SPLOST proceeds that cities rely on for capital projects. Commissioners flagged uncertainty about whether the MARTA tax would be exempt from the cap; if MARTA is exempt, some participants said the county could still pursue a SPLOST renewal. Commissioners asked staff to circulate plain‑language summaries of HB 581 and guidance documents from municipal associations; counsel agreed to forward a digest and related materials.

On homestead exemptions, the commission discussed two paths: (1) revive the original freeze exemption so new city homestead applicants could freeze assessed values (a protection against increases due to rapid assessment growth), or (2) create a floating exemption tied to inflation (for example, permit assessed values to rise only by the rate of inflation or inflation plus a fixed increment). Participants weighed tradeoffs: a freeze protects long‑term homeowners from rising assessments but reduces the city’s property‑tax revenue and could force higher millage rates or other revenue measures to maintain services. A floating exemption allows revenue to grow as property values increase, but offers less protection for homeowners.

Commissioners also discussed the charter’s 3.35‑mill ad valorem cap. Staff explained that mills associated with services the county currently provides and that the city later assumes (police, public works, sanitation if applicable) will transfer to the city, increasing the effective millage base. The charter’s cap permits the city council to increase the cap by home‑rule action or by voter referendum in specified circumstances; commissioners debated whether raising the cap should require a referendum. They also asked staff to research whether other Georgia city charters include millage caps and what practices peer cities follow.

Public commenters and commissioners raised equity concerns: several members expressed concern that a freeze that overly restricts revenue could leave the burden of new or improved services on homeowners — noting Stonecrest’s tax digest is heavily residential — while others noted that many residents said they wanted tax protections when the city was created. Commissioners discussed balancing protection for long‑term homeowners with the city’s need to grow a commercial tax base so services can be funded without excessive homeowner burden.

The commission voted to table further action on sections 5.08 and 5.13 until the next meeting to allow members time to review HB 581 materials and to research charter millage caps in comparable municipalities. Counsel and staff agreed to circulate an accessible summary of HB 581 and model materials from municipal associations.

Why it matters: homestead exemptions and millage caps shape how property tax burdens are shared between homeowners and businesses and determine the city’s flexibility to fund services such as local police or capital projects that would otherwise be provided by the county.

What happens next: staff will circulate a plain‑language summary of HB 581 and municipal association guidance, and will research whether peer city charters include millage caps. The commission will take up the freeze/float and millage‑cap questions at a later meeting.