Cherokee County school officials outline $58 million shortfall if district does not opt out of statewide floating homestead exemption

Cherokee County school officials told a midday public hearing Feb. 13 that the district could face a cumulative $58 million shortfall over three years if the board does not use a one-time window to opt out of the statewide "floating" homestead exemption approved by voters last November.

The hearing was the second of three required public hearings before the Cherokee County School Board considers a resolution on the opt-out. Chief Financial Officer Mr. Owen presented the board's financial analysis and described how the exemption, as implemented by House Bill 581 and the related constitutional amendment, would limit annual increases in assessed value for homesteads to the inflation rate unless the property is sold or significantly improved.

The school district projects the cap will cut local revenue because local real estate growth is currently running above the inflation rate the Georgia Department of Revenue will apply. "We are looking at a $58,000,000 cumulative shortfall over the next 3 years," Mr. Owen said, and explained that the gap accumulates because the floating exemption layers year over year.

Why it matters: Local property tax revenue pays for services the state formula — the Quality Basic Education (QBE) formula — does not fully fund, the district said. Mr. Owen told the board that roughly 52% of the district's budget is funded with local dollars, and he cited examples: local taxpayers covered about 92% of transportation costs in FY 2024, roughly 70% of nurses and safety and security costs for that year, and about 87% of technology spending. The district's average home value is listed in the presentation as $465,000 and the district said there are 62,227 homesteaded properties in Cherokee County.

Public comments split. Brent Herron, a Cherokee County resident, told the board he believes the floating exemption "doesn't result in a loss of any revenue" and said the district's model fails to capture sales "churn" and future growth. "When you assume that the loss of that appreciation is a loss of revenue, what you're really assuming is that my appreciation in my home belongs to you as opposed to me," Herron said.

Several speakers urged the board to opt out. Dr. Jennifer Johnson, a retired CCSD teacher and administrator, called the exemption "financially devastating to our schools" and warned it would likely lead to cuts in school police, nurses and transportation, larger class sizes and furlough days. "The projected loss of $58,000,000 in revenue would likely mean that there would be deep cuts," she said.

Other public commenters criticized past district spending decisions and raised concerns about superintendent and central-office pay. Dave Dwyer read a statement comparing local leadership pay to federal figures and said the board's ability to raise the millage rate makes opting out unnecessary; he also asserted the district could address funding shortfalls by increasing the mill rate.

District officials and several speakers emphasized that the recently expanded local senior homestead exemption — approved by Cherokee County voters in a March 2024 referendum and now exempting school taxes for county homeowners age 62 and older regardless of home value — is not affected by the board's opt-out decision. Mr. Owen reiterated that the senior exemption is permanent absent another referendum.

Next steps: Mr. Owen noted the board will hold a third required public hearing that evening and that the board will consider a formal resolution on the opt-out at the 7 p.m. board meeting on Feb. 13. The hearing was adjourned after public comment.

Ending: Board members thanked staff for the presentation and collected public input during the three-minute public-comment slots. The board scheduled a final public hearing and will consider a resolution later the same day.