Cherokee County holds first hearing on statewide floating homestead exemption; CFO warns of multimillion-dollar shortfall

Cherokee County School District held the first of three required public hearings on Feb. 5 to gather input about whether local taxing authorities should opt out of a new statewide floating homestead exemption, and district Chief Financial Officer Mr. Owen presented estimates showing a potential multimillion-dollar reduction in local revenue.

"That difference is what we're talking about here," Mr. Owen said, describing the gap between actual assessed-value growth and the inflation factor that would be used under the exemption. He estimated roughly $10,600,000 in lost local revenue for Cherokee County Schools in the first year, rising to about $19.1 million in year two and $28.4 million in year three under his modeling, and said the exemption would compound the exempted amount year to year.

Why it matters: The exemption, approved as a statewide constitutional amendment in November 2024, limits increases in taxable assessed value on owner-occupied homes to the inflation rate unless sold or substantially improved. Mr. Owen said that for 2025 the Georgia Department of Revenue is not applying an inflationary factor, effectively freezing the digest for this purpose until 2026; that gap between actual market growth and the exemption's inflation factor is the revenue at stake.

Mr. Owen framed the district's options as (1) opt out of the statewide exemption, (2) permanently reduce expenditures (he cited an estimated $58 million reduction over three years to fully offset the exemption), or (3) replace lost revenue by raising the millage rate. He outlined where local funds are used — transportation, school nurses, safety and security, teacher pay and classroom technology — and repeatedly noted that local funding currently covers portions of services not paid for by the state's Quality Basic Education (QBE) formula.

Public comment: Ten speakers signed up for the hearing; the majority urged the board to opt out. Nicole Balacek, a River Ridge High School council member and parent, told the board she supported opting out to "safeguard our public schools from drastic funding cuts" and praised recent board fiscal moves such as millage reductions and early bond payoffs.

"I trust that the district opting out of HB 581 is a decision made with the best interest of the future of our community in mind," Balacek said.

Former teacher and parent Miranda Wicker said the exemption would force staffing reductions and furloughs she experienced during the Great Recession and urged the board to preserve local control by opting out. Parent Whitney Spear said the law would create a "compounding shortfall" and warned the district would have to cut essential services if it could not replace the revenue.

Other speakers made contrasting points. David Ware, a volunteer for the Cherokee County Republican Party, said the board should seek temporary internal cuts rather than opt out immediately. Robert Stellick and Randy Stoops asked the board to honor the statewide vote and the legislature by not opting out; Stellick suggested raising the millage rate if the board needs revenue so the increase is directly attributable to elected members.

Process and next steps: Mr. Owen and Superintendent Dr. Mary Elizabeth Davis emphasized this hearing is the first of three required public hearings; the CFO noted there are two additional hearings scheduled Feb. 13 at 11:30 a.m. and 6:30 p.m., with the board to consider a resolution on the 13th. No formal opt-out vote occurred at the Feb. 5 hearing.

Adjournment: The board adjourned the public hearing following public comment. A board member identified as "Kelly" moved to adjourn; a second was requested and the chair called for an "Aye" vote to close the hearing.

What was not decided: The board did not vote on opting out at this meeting. The figures presented by the CFO are his estimates and were the basis for public comment; board members did not adopt a formal resolution during the Feb. 5 hearing.

Direct quotes used in this article are from speakers at the Feb. 5 public hearing and are attributed to them by name and role as stated in the record.