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Finance director outlines FY26 budget risks after reassessment, cites $650M in exemptions and frozen homestead values
Summary
The district finance director told the board that reassessments and a large rise in exemption totals — driven in part by the district’s opt-in to a floating homestead exemption under House Bill 581 — complicate FY26 revenue projections and budget planning.
The Catoosa County schools finance director presented a budget progress report on June 3 that emphasized how reassessments and new exemptions will affect the district’s FY26 revenue projections and millage-rate decisions.
District staff said the county board of assessors approved about $222 million in increased assessed value for existing property, but new exemptions and the district’s opt-in to the House Bill 581 floating homestead exemption mean the net taxable reassessment value is substantially smaller. The presentation identified about $39.7 million in new property growth that was largely offset by $40.1 million in new exemptions and an $87 million exemption total arising from the district’s adoption of House Bill 581 mechanics. Overall exemptions were projected to rise to roughly $650 million (about a 24% increase) for tax year 2025.
District staff noted those mechanics freeze homesteaded property taxable values at their 2024 levels for this tax year; the Department of Revenue-set inflation adjustment can change values in later years. The finance director gave a worked example: an average $275,000 home with a homestead exemption would pay the same school tax in 2025 as in 2024 if the millage rate remains at 14.87. If inflation-adjusted reassessment applies next year, the example homeowner would see an estimated $50 increase at a 3% inflation factor.
The director said the district expects to lose the opportunity to capture about $590,000 in revenue that would have been associated with the $39.7 million in new property growth. He listed outstanding items the board needs to finalize the budget: the final local tax digest (after the appeal period, expected mid‑July), federal and state grant allocations (timing varies), and final calculations for any payroll/benefit changes tied to the Kelly Services staffing transition. The finance presentation included current FY26 projection figures: revenues of about $142.4 million and expenditures of about $141.9 million, giving a modest projected surplus of roughly $420,480 assuming the current millage of 14.87 and the estimates presented.
The director also summarized prior cost-reduction steps taken by district leadership: elimination of more than 90 positions over two years (estimated savings of roughly $5.3 million), department-level expense reductions, participation in the Peach State education tax credit program, and accounting shifts that moved some costs to ESSER/East Blos in keeping with GASB guidance.
