Clayton County hearing reviews HB 581 homestead cap and potential revenue losses if district does not opt out

Clayton County Public Schools officials and the county tax commissioner briefed residents on HB 581 and the district's options during a public hearing Jan. 27, 2025, that included a short presentation from Chief Financial Officer Ramona Bivens and comments from Tax Commissioner Danielle Smith and community members.

Bivens told the Clayton County Board of Education that HB 581 would limit increases in the taxable value of homestead property to the annual rate of inflation set by the state, and that the law would apply only to homestead property. "The bill, though, the legislation provided a provision for governments to opt out. It's a one time opportunity to opt out," she said, describing the procedural requirements the law sets for any local opt-out decision.

The hearing underscored the district's fiscal exposure under the bill if it does not opt out. Bivens presented district revenue and digest history and said state funding through the Quality Basic Education (QBE) program supplies roughly 60% of the district's revenue while local taxes supply about 40%. Using past assessed-value growth as an example, she said the district could face substantial cumulative losses if annual collectible growth were capped at the consumer price index (CPI).

"Had this bill been in place over the previous seven years, the district could have potentially lost an estimated $35,000,000 over that six year period," Bivens said. Using an illustrative scenario that assumed an 8% annual increase in assessed values versus a 2.9% CPI cap, she showed projected revenue reductions of roughly $5,000,000 in a single future fiscal year and a multi‑year cumulative shortfall she described as "a little over $38,000,000" across five years under those assumptions.

Bivens emphasized that the cap would affect the district's ability to fund operations: "Capping property tax revenue available to the district each year will prevent the district from offering more competitive salaries, providing innovative programs for our scholars, delayed facilities maintenance, and providing a safe learning environment." She noted the Georgia Constitution limits millage rates to a maximum of 20 mills and that the district's current millage is 19.6. "If we were to increase it to the full 20 mills, it would generate an additional $440,000," she said.

Tax Commissioner Danielle Smith answered procedural and eligibility questions from the audience and board. She told attendees that under HB 581, homeowners who had homestead exemptions in 2024 would be "automatically in" the cap if the governing body does not opt out, and clarified the mechanics of the opt-out decision: "There is no opting in. There's only opting out. If you don't opt out, you're automatically in." She also warned that legislation being considered during the session could later require all jurisdictions to adopt HB 581's approach and urged residents to contact local legislators about that possibility.

Public comment at the hearing included remarks from local resident Tim Hines, who identified himself as a longtime Clayton County resident and said he favors the board opting out. "There are two general reasons why I would urge this board to opt out of the homestead exemption," Hines told the board, arguing the exemption could discourage property turnover and new housing stock and citing experience in other states.

Bivens closed the presentation by noting that opting out would not affect existing homestead exemptions such as the district's $10,000 standard homestead exemption, senior exemptions, or disability exemptions; the floating homestead exemption HB 581 creates would be an additional exemption layered on top of those currently available.

The board held three required public hearings for an opt-out decision; this session served as the evening hearing. No opt-out vote occurred at the Jan. 27 meeting. The tax commissioner said there will be additional hearings and reminded the public of a third hearing the next week.