Oconee County schools hold hearings on whether to opt out of HB 581 homestead cap

Oconee County Board of Education staff opened a public hearing Jan. 23 on whether the district should opt out of House Bill 581, a state law that would limit annual taxable-value increases for homesteaded property to the prior year's federal inflation rate.

The hearing is the first of three scheduled public meetings on the subject (Jan. 23, Jan. 28 and Feb. 3). School staff told the board the district has a single opportunity to opt out and must complete the opt-out process by March 1, 2025. Staff presented projections that, had HB 581 been in effect over the last seven years, Oconee County Schools (OCS) would have collected about $13,900,000 less in local revenue.

The presentation, given by school staff (referred to in meeting notes as Mr. Adams), summarized how the bill would function and the potential local budget effects. "HB 581 is a floating homestead exemption that limits the annual increase in property tax assessments to the federal inflationary rate from the prior year," Mr. Adams said. Staff told the board the state will set the specific inflation rate and that, to date, the rate is "yet to be determined." Staff also noted that OCS relies on a mix of revenue sources: about 40% local funds and 54% state funds, and that property tax revenue supports personnel costs, transportation, supplies and curriculum.

Staff described two revenue scenarios based on different assumed inflation rates. The presentation said a three-year average using the consumer price index would have reduced revenue by roughly $2.7 million in the most recent three-year period and about $8.1 million under another averaging scenario; staff characterized the changes as potentially significant for OCS fiscal planning. The materials also said one mill in Oconee County is approximately $3.5 million in revenue and equates to about 34 teachers on current budget assumptions. For 2025, staff reported the OCS millage rate at 14.25 mills; state law caps school millage at 20 mills.

School staff emphasized that opting out is a one-time decision with long-term effects and that the opt-out would not change any existing homestead exemptions. The presentation included an example that, if the district experienced revenue reductions under HB 581, officials could consider increasing the millage rate to maintain services, subject to the statutory maximum.

During public comment, four Oconee County residents spoke. Roy Baron said he and his wife planned to attend subsequent hearings and asked: "I don't understand how you can even consider opting out when voters voted 64% for this bill." Ian Taylor, a resident, addressed the board at length and said: "When local taxing authorities continually ignore the citizens, it is the duty of the state to intervene, which I believe they have just done." Taylor also criticized the district's financial analysis as "superficial and over simplistic" and argued that prior millage adjustments would have restored lost revenue in the scenarios he reviewed.

Bill Fox urged the board to honor the voter decision and stressed concerns about seniors on fixed incomes, saying: "If you get to be 94 years old like my neighbor, it ought to be 0. I mean, it's ridiculous to keep paying property tax till you die." Esther Porter asked the board not to opt out and reminded members that HB 581 applies only to owner-occupied homes, not commercial, industrial or rental properties.

Board members asked staff clarifying questions about which portions of local millage HB 581 would affect. One board member asked whether the first five mills that feed the state under the QBE (Quality Basic Education) funding formula would be covered by the cap; staff replied that the exemption is treated as a local exemption and would apply only to the locally retained mills (the presentation said 9.25 mills remain with the school system in the district's example). Staff also confirmed there is no expiration (sunset) in the law and that if the board opts out, that decision would not affect existing homestead exemptions.

No formal vote or board decision was recorded at the Jan. 23 hearing. The board scheduled two additional public hearings (Jan. 28 at 6 p.m. and Feb. 3 at 4 p.m.) before the March 1 opt-out deadline.

Next steps: the board will continue the scheduled hearings and has not yet made a decision on whether to opt out of HB 581.