Clayton County holds third public hearing on House Bill 5 81 as officials weigh opt-in deadline and budget tradeoffs

At a Feb. 21 Clayton County Board of Commissioners meeting, the county held a third public hearing on House Bill 5 81, the recent state law that creates a floating, inflation-tied homestead exemption and authorizes a new temporary local-option sales tax option. Financial advisor Ed Wall told the board, “House bill 5 81, This is our third and final public hearing.”

The bill would let counties opt into a floating homestead exemption that limits how much a homesteaded residence—for tax purposes—can be revalued each year by capping the assessment increase to inflation. If a county remains opted in it would also have the option, together with all cities in the county, to place a floating local option sales tax (FLOS) on the ballot for up to 1 percent over a five-year term. County staff and outside advisers urged commissioners to weigh homeowner savings against reduced future county revenue.

Why it matters: The commissioners must decide whether to opt out and submit a resolution to the secretary of state before March. County staff and the county's financial advisers presented numeric examples showing modest homeowner savings for low- and mid-value homes but notable multi-year revenue losses for county funds if the county stays opted in.

Adviser analysis and local fiscal impact Financial adviser Ed Wall and CFO Stacy Merritt ran examples showing how the floating homestead exemption would operate. For a $250,000 home that grows in value by 6 percent but where CPI is 3 percent, the owner would see an estimated combined county savings of about $146 in the first year, according to the presentation. For larger home values the modeled savings rose (the advisers illustrated $229 and $343 examples for $500,000 and $750,000 homes respectively).

Merritt and the county's budget team projected that opting in could reduce the county's potential property-tax revenue in coming years because the state's formula would limit assessed growth for homesteaded properties to the CPI rather than market increases. Merritt presented a three-year scenario comparing a 6 percent annual market growth against a 3 percent CPI cap and showed cumulative revenue shortfalls building each year.

Public-safety implications Fire Chief Sweatt told the board the fire fund is almost entirely property-tax financed and described how the projected revenue shortfalls could affect daily operations. "In the first year of fiscal year 26, if I had to take a reduction in half a million dollars in revenue... I would have to shut down 2 pieces of apparatus every 3 days to make up that lost revenue," Chief Sweatt said, adding that larger multi-year shortfalls would force more frequent apparatus reductions and could affect the department's ISO rating and insurance costs for residents.

Process, timelines and state action Advisers reminded the board that the county's decision affects only the county portion of property taxes; the school board and cities must make their own choices. Wall also noted a House Ways and Means committee substitute (House Bill 92, described as a proposed "fix") that, if enacted, would alter timing and survivorship details; he stressed the committee action was a pending change and not final.

Public comment: a divided public Residents and community leaders who spoke at the hearing were sharply divided. Some urged staying opted in to protect homeowners from large one-year tax increases; others urged opting out, warning of long-term revenue loss and service cuts. "I do not want to opt out," resident Gloria McCain told the board, "I would rather stay in." Others, including homeowners and local businesspeople, said they feared the county would be locked into a system that reduces future revenue and hinders service funding.

What comes next Commissioners said they wanted the hearing record, the advisers' analyses and additional staff follow-up before taking a final vote. Under current state law as explained at the hearing, the board must adopt a resolution and submit it to the secretary of state by the statutory deadline in March to opt out; otherwise, the county would remain opted in. Advisers and staff said the commission can make its decision at any of the required public hearings so long as it meets the deadline.

The board did not take a final vote on HB 5 81 at the Feb. 21 meeting; commissioners signaled they would review the materials presented and make a decision before the March statutory deadline.