Oconee County holds second public hearing on HB 581 homestead exemption

Oconee County Schools held the second of three public hearings on House Bill 581 on Jan. 28, 2025, as staff outlined projected declines in local property tax revenue tied to the bill and residents offered mixed views on whether the board should opt out.

Peter Adams, a representative of Oconee County Schools, told the board and community the purpose of the hearing was "to provide information on hb581 to the board and the community and to listen to any thoughts from Oconee County residents." Adams said HB 581 creates a floating homestead exemption that would limit annual increases in assessed value for homestead properties to an inflationary rate set by the state and that school districts have one opportunity to opt out; if they do not opt out, the cap would begin in 2025 based on 2024 values.

Adams presented district projections showing that Oconee County Schools (OCS) could have collected about $13,900,000 less over the last seven years under HB 581, and that a three-year average figure used in his presentation was $2,700,000 annually (which he said would total about an $8,100,000 decrease over three years). He said the change "could significantly impact tax revenues for Oconee County Schools" and could reduce the district's flexibility to meet local needs, including competitive salaries and benefits.

Why it matters: HB 581 would cap increases in taxable assessed value for owner-occupied homestead properties at a state-determined inflation rate, shifting some tax growth pressure away from homeowners. Oconee County Schools relies on a mix of state and local funding; Adams said the district is funded roughly 54% from the state and 46% from local property taxes. If assessed values are capped, the district may need to raise its millage rate to maintain services; Adams said the current FY2025 millage rate is 14.25 mills and that the statutory maximum for school districts is 20 mills.

Adams also noted Oconee County Schools has grown by two schools and about 1,450 students since 2014, while the millage rate has fallen from about 17.5 mills in 2014 to 14.25 mills in 2025. He said some statewide changes cited in the governor's budget — including a potential roughly $125 monthly increase in health insurance costs for classified personnel and increases in the TRS rate — could add about $1 million in annual unfunded costs, which would compound any revenue loss from HB 581.

On specific technical points, Adams said the bill treats some local levies (the presentation referenced the treatment of the first five mills under the QBE formula) differently and that the QBE calculation would use the actual value of a homestead for the portion of tax that funds QBE rather than an inflation-managed homestead value. He also said homestead freezes for seniors (assessments that freeze at age thresholds) would not be removed by HB 581; he explained that when a property sells, the assessed value resets to the new sales price and that new construction and commercial growth would still appear in the tax digest.

Public comment: Four residents spoke during the hearing. - Ian Taylor said the QBE formula is complex and argued that the district's projected average annual revenue loss is small as a share of the budget. "The millage rates mean nothing to me," Taylor said. "It's the amount of money that I've got to go and ink the check with at the courthouse." Taylor urged the board to treat the projections as one input among many. - Charles "Chuck" Hunt, a longtime county resident who said he serves on the planning commission, urged the board not to opt out of the homestead protections, calling the proposed stabilization of taxes for owner-occupied homes important to families with schoolchildren. - Victoria Cruz said many voters were confused by the ballot language and that she believes voters intended to enroll in the homestead exemption; she said "they did vote for you to opt in. They didn't ... vote for you to opt out." Cruz urged caution about raising taxes on homeowners. - Roy Byrne said the public had expressed itself by a 64% vote in favor of the homestead measure and urged the board to accept "the will of the people."

Board process and next steps: Adams and board members reiterated that the board must complete an intent-to-opt-out process by March 1, 2025, if it chooses to opt out. Board members said they will consider public input and the district's budget outlook as they decide. No formal opt-out decision or vote was taken at the Jan. 28 hearing; the board scheduled a third hearing for Feb. 3 at 4 p.m. as part of the statutorily required public-hearing sequence.

The hearing included technical explanations about how HB 581 would interact with the QBE funding formula, how assessed values reset on sale, and limits on the district's revenue-raising options (school districts cannot levy a one-cent sales tax in the same way counties or municipalities can). Adams warned the choice is "a one-time decision with long-term financial impact," and several residents urged the board to weigh both homeowner relief and district funding needs before acting.

No formal motion or vote occurred during the Jan. 28 hearing. The board will receive additional public comment and staff analysis at the remaining hearings before any formal action is taken.