Clayton County holds public hearing on HB 581; no decision reached on opting out

The Clayton County Board of Commissioners held a special-called public hearing on Feb. 18 to review House Bill 581, a 2024 state measure that creates a floating homestead exemption tied to inflation, authorizes a new five-year floating local option sales tax (FLOST) for jurisdictions that remain in the homestead program, and changes how certain rollback and assessment calculations are handled. County financial staff presented projected revenue impacts and residents — many of them seniors on fixed incomes — urged the board to opt out.

Why it matters: HB 581 changes how assessors treat homestead properties (limiting assessed-value increases to the prior year’s inflation for qualifying homes) while offering counties and cities a new sales-tax tool that could be used to replace property tax revenue dollar-for-dollar. Opting out requires a formal local decision, three public hearings and a resolution filed with the secretary of state by the March statutory deadline; the county made no opt-out decision at the hearing.

County presentations and staff analysis Ed Wall, the county’s financial adviser, told the board "House bill 5 81 does 3 things": (1) create a floating homestead exemption tied to inflation, (2) create a floating local option sales tax available only to jurisdictions that remain in the floating homestead exemption, and (3) simplify some rollback/levy calculations. He said the constitutional amendment enabling the change was on the November 2024 ballot and passed statewide, and that HB 581 took effect Jan. 1, 2025. Wall said 535 cities, 80 school systems and 59 counties were automatically opted in statewide unless they opt out locally by the March deadline and three public hearings.

Stacy Merritt, the county’s finance officer, described county budget goals and warned that adopting HB 581 could reduce property-tax growth from homesteaded residential properties. Merritt said staff reduced the state-level analysis into county-specific projections and noted the figures presented covered only residential homesteaded digest impacts and did not include commercial digest growth (commercial property is not affected by the homestead change). She reiterated that county services and staffing priorities would be preserved as best possible but that reduced assessment growth could reduce future revenue available for service expansion.

Clayton County Fire Chief Sweatt outlined estimated impacts to the fire fund if HB 581 is implemented with inflation caps lower than assessed-value growth. Chief Sweatt presented staff projections showing a potential multi-year revenue shortfall on the homesteaded portion of the maintenance and operations (M&O) revenue stream. He summarized operational consequences in concrete terms: to absorb an estimated $500,000 shortfall in one year the fire department would likely have to remove a fire engine and an ambulance from service for portions of the year; larger projected shortfalls in subsequent years could require more frequent apparatus reductions. He also warned that sustained cuts could affect Clayton’s Class 1 ISO public protection classification, which influences local insurance rates and economic-development competitiveness. The fire fund’s homestead millage was described as 4.146 mills (the fund cap set in 1967 is 5 mills); the county’s general fund millage was described in presentation material as 15.266 mills.

Examples and figures presented - Staff used three house examples to show the mechanics: a $250,000 house with a 6% assessment increase (to $265,000) but a 3% inflation cap would be treated as $257,500 for tax purposes, creating a $7,500 homestead exemption for that year. Using the stated millages, staff calculated roughly $114 in annual savings from the general fund millage and about $31 from the fire fund millage — about $146 total for that first year for the example homeowner. Similar examples for $500,000 and $750,000 homes produced estimated first-year savings of roughly $292 and $437 respectively, using the millage figures staff presented. - Staff noted the FLOST can be levied only in 0.05 (nickel) increments for five-year terms, requires an intergovernmental agreement among the county and its cities on revenue sharing (state statute references population-based sharing), must be approved by voters (the earliest local election the board could take it to voters would be the upcoming November), and required raising the statewide sales-tax cap from 8 cents to 9 cents via the constitutional amendment. - County staff said Jonesboro had already decided to opt in; the Clayton County School Board had opted out and cited a 20-mill cap they said left them little room to lose revenue. Staff emphasized that FLOST is unavailable if any city in the county opts out of the floating homestead exemption and that nearly every city in Clayton County was holding similar hearings.

Public comments and community concerns The hearing’s public comment period ran for roughly 30 minutes of speakers who focused overwhelmingly on affordability concerns. Dozens of residents — many identifying themselves as seniors on fixed incomes or disabled — told commissioners they feared losing homes if property taxes rose or if local revenues shifted away from homeowners. Common themes: - Confusion about the ballot language and the November 2024 vote: multiple speakers said the amendment was not written or explained in plain language and that many voters did not understand what they approved. - Requests that the county opt out of HB 581 to preserve local tax control and to avoid the potential revenue impacts that would force service cuts or higher rates on other taxpayers. - Calls for clearer, mailed notifications to seniors and homeowners (speakers repeatedly asked the county to send paper notices to older residents rather than relying on social media). - Appeals to preserve fire, police and other services; several speakers said service reductions would be harmful to public safety and quality of life. Representative comments included: "Opt out," from Leticia Lee Smith of Jonesboro, and practical appeals such as Joanne Hicks’s request that the county consider raising the county sales tax instead of shifting the burden to homeowners.

Board questions and process notes Commissioner Reeves and other board members asked technical questions about whether the fire fund is funded solely by its separate millage (staff confirmed it is), whether the fire fund millage can be increased (staff said the historical cap is 5 mills), and whether the staff projections included commercial digest growth (Merritt said the presented projections addressed only residential homesteaded properties). Staff also stressed procedural limits: if the county chooses to opt out of the statewide default it must follow the law’s public-notice and hearing requirements and file the required resolution with the secretary of state by the March statutory deadline; if the county opts in and later wants to change local homestead policy, it would need legislative action.

Decisions and next steps The board did not take a formal vote to opt in or opt out of HB 581 during the Feb. 18 special call meeting. The meeting did record routine procedural votes: the board adopted the meeting agenda and later moved to adjourn. County staff said additional city hearings were underway across Clayton and that the county’s final decision — if made to opt out — would be memorialized by a resolution the county attorney must file with the secretary of state by March. Staff also said the earliest the county could place a FLOST referendum before voters would be this November and that any FLOST renewal would require action by the local legislative delegation and the governor to reauthorize it after five years.

What remains unresolved: the county has yet to decide whether to opt out. Commissioners will weigh staff revenue projections, the public testimony focused on seniors and fixed-income households, and the intergovernmental constraints on a FLOST if any city in the county opts out. The county’s stated next procedural deadline is the March filing date for any opt-out resolution; staff and residents said more local hearings are scheduled in the coming weeks.

Ending At the Feb. 18 session the board heard substantive financial and public-safety analyses from county staff and nearly three dozen public speakers but did not take a policy vote on HB 581. The clock for a local opt-out runs to March under the law; the county attorney must file an opt-out resolution with the secretary of state if the board formally chooses that path. Residents who spoke asked for clearer outreach to seniors and for the board to consider local homestead-exemption alternatives and options to attract commercial revenue rather than shift costs to homeowners.