Clayton County holds public hearing on HB 581; officials warn fire fund revenue could fall if county stays opted in

The Clayton County Board of Commissioners held a public hearing Feb. 18 on House Bill 581 — the statewide 2024 law that creates an inflation‑tied floating homestead exemption and an associated five‑year floating local option sales tax (FLOST) — and heard repeated warnings from county officials that opting in could reduce local revenue and strain county services, particularly the fire fund.

County leaders said the board has not decided whether to opt in or opt out and is holding the hearing to take public comment required under the law. Financial advisor Ed Wall and Interim CFO Stacy Merritt presented the bill’s mechanics and projected revenue impacts; Fire Chief Sweatt described how the change could translate into reduced fire‑department staffing and equipment availability.

Why it matters: HB 581 ties the assessed value growth for homesteaded residences to inflation rather than full appraisal increases and permits a new five‑year sales tax to replace property tax revenue dollar for dollar only if local governments remain within the new homestead framework. County staff said the law took effect Jan. 1 after voters approved a related constitutional amendment in November 2024; the statute gives local governments until March to publish required notices and hold three hearings if they intend to opt out of the new regime.

Wall said HB 581 limits how much a homesteaded property’s assessed value may increase for tax purposes to the prior year’s inflation rate. Using a 3% inflation example for 2024, he showed sample household calculations: a $250,000 home with a 6% reassessment would be capped for tax purposes at $257,500, producing a difference that becomes a continuing homestead exemption as long as the owner remains in the home. Wall also summarized the FLOST rules: the tax can be levied in 0.05 (nickel) increments for five‑year terms, must be approved by voters, and requires an intergovernmental agreement with all cities to share proceeds. He said nearly every city in the county is holding its own hearings and that Jonesboro had already acted.

CFO Stacy Merritt and Fire Chief Sweatt focused on county revenue and service impacts. Merritt said the county will continue to meet obligations regardless of the board’s choice, but that opting in would reduce the county’s opportunity to capture revenue growth from rising residential assessments. Merritt flagged the potential for reduced growth in services and limits on planned expansion, including fire staffing and station growth, if revenues fall.

Chief Sweatt provided a three‑year projection for the fire fund under a scenario in which home values rose 6% annually but assessments for homesteaded properties were limited by a 3% CPI cap. He said the department’s adopted fire fund millage rate has been 4.146 mills for several years and that projected revenue shortfalls could total about $500,000 in the first year, about $1.04 million in year two and about $1.6 million in year three — roughly $3 million over three years in his summary — and that personnel costs represent about 84–86% of the fire‑fund operating budget. Sweatt warned that to absorb such reductions the department might have to reduce apparatus and medical transport availability on a recurring schedule (for example, “shut down 1 fire truck and 1 ambulance every third day” to recover a half‑million deficit), and he cautioned that service cuts could affect the county’s Class 1 ISO rating and economic development.

Commissioners and staff clarified process points: the law automatically opted jurisdictions in statewide on Jan. 1; to opt out a jurisdiction must advertise and hold three public hearings and then file a resolution with the secretary of state by the statutory March deadline (county attorney Chuck Reed was named as the official who would file such a resolution). Staff emphasized that once a jurisdiction is opted in under HB 581, it cannot unilaterally exit the regime except by seeking legislative or statewide action.

Public comments: about three dozen residents spoke during the 30‑minute hearing, with many self‑identified seniors and fixed‑income residents describing anxiety about rising property taxes and household bills. Speakers repeatedly asked whether school taxes were affected (staff said the school systems had made their own choices and that one local school board had already opted out) and urged the county to opt out. Representative public comments included: “Trust is based on transparency and accountability,” said Orlando Gooding, and “Opt out. Opt out,” said Leticia Lee Smith, who identified herself as disabled and on a limited income. Multiple speakers requested clearer, mailed explanations of the change and said the ballot language was hard for lay voters to parse.

Formal actions and next steps: the board adopted the meeting agenda and later adjourned by unanimous voice votes; the hearing itself does not constitute a decision on opt in/opt out. County staff said the public hearings are intended to educate residents and gather comment before the board makes a final determination after the required three hearings. If the board chooses to opt out, staff said the county attorney must file the opt‑out resolution with the secretary of state by the March deadline. No opt‑out or opt‑in vote took place at this meeting.

The presentations and public comments left the central choice — whether Clayton County will opt into HB 581 and thereby make the county eligible to pursue the five‑year FLOST tied to the homestead exemption — unresolved. The board scheduled additional hearings and told residents they may speak at later sessions; staff recommended that residents attend city and school board hearings as well because those jurisdictions’ choices affect whether a county‑level FLOST could proceed.

Sources and direct quotes in this article come from presentations and public comments at the Feb. 18, 2025 Clayton County Board of Commissioners special call hearing on HB 581.