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Stonecrest holds first public hearing on whether to opt out of state's HB 581 homestead changes
Summary
City staff briefed residents and council on House Bill 581 and the timeline to decide whether Stonecrest will opt out; staff and residents raised concerns about long-term revenue shifts, local control and information access. No council decision was made; the public hearing process continues with final action scheduled for Feb. 24.
Stonecrest city staff on Monday opened the first of three public hearings required by state law on whether the city should opt out of House Bill 581, a recent Georgia law that would change how homestead exemptions and a new floating local option sales tax operate.
Deputy City Manager Michael McCoy said the city is following the statutorily required opt-out timeline and that no decision has been made: "On Jan. 13, the council moved forward with proceeding with the process to opt out. No decision has been made," McCoy said. He read the schedule for the public hearings and said the next hearing will be Feb. 10 and the final action is scheduled for Feb. 24.
Financial adviser Ed Wall outlined how HB 581 would work and its likely effects on Stonecrest's future taxable digest. Wall described three principal elements in the law: a floating homestead exemption linked to inflation, a floating local option sales tax that must be countywide to take effect, and changes to how local governments perform rollback calculations each year. He said the floating homestead exemption would cap the annual assessed-value growth for homestead properties at inflation and warned that, "if you stay opted in, you can never get out. If you opt out, you never opt back in." Using the council's current millage and digest figures, Wall estimated that, in a sample year, the floating exemption could reduce future revenue growth and gave an example where the difference in annual tax revenue could be roughly $114,000 on his hypothetical assumptions.
Residents and community groups used the public-comment portion of the hearing to raise questions and objections and to urge both caution and local control. Faye Cofield, executive director of the Evelyn Stokes Foundation, said she was concerned about how the city had recently allocated ARPA funds and questioned whether nonprofits and schools had been treated fairly when federal funds were distributed.
Dave Marcus, a resident and former accountant, said he had lost confidence in Stonecrest's financial reporting and urged a comprehensive audit before permanent policy changes are made. Jill Thibodeaux urged the council to "take courage, maintain local control, and opt out," saying the city needs locally driven fiscal decisions rather than state-imposed formulas. Other speakers expressed distrust of state-level changes, concerns about long-term tax burdens if the city opted out and requests for clearer, plain-language outreach materials.
Council members and staff pledged additional public outreach between hearings. McCoy and other staff said informational materials are available in the council meeting packet and on the city website and that the city will provide details by email, phone and social media. Council members also said they plan town-hall style meetings to discuss the issue with residents outside the formal public-hearing format.
Procedural action taken at the close of the hearing was limited to moving to close this public hearing session. Councilman Pai moved to close the public hearing on intent to opt out of HB 581; the motion passed 5-0. No vote on opting out was taken at the Jan. 27 meeting.
The council and city staff repeatedly reminded residents that the state legislature could alter the bill or its deadlines while the city's hearings are under way; staff said they were monitoring pending state proposals that could extend the decision deadline.
Why it matters: HB 581, as described to the council, would shift how future property-tax growth from owner-occupied homes is handled and create a new countywide sales tax option that could be used to reduce property taxes. For a small city with an existing charter millage cap and a residential-heavy digest, the tradeoff between immediate homeowner savings and future revenue growth is a complex fiscal policy decision that would affect local services and the city's ability to assume additional functions now provided by DeKalb County.
The City of Stonecrest will hold two more public hearings (Feb. 10 and Feb. 24); the council may take final action on whether to opt out on Feb. 24, but staff said that would depend on state action and any changes to the law's deadlines.
