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Peachtree City staff flags HB 581 referendum as potential game-changer for property tax and LOST
Summary
City staff warned that Georgias HB 581 (headed for a statewide referendum) could cap homestead assessment growth tied to inflation, require local opt-in/opt-out decisions by March 2025, and create a new local option sales tax that would need intergovernmental negotiation to split revenues within the county.
Justin Strickland told the council that House Bill 581, passed by the Georgia General Assembly and signed by the governor, will appear on a statewide referendum in November and could materially affect local revenues if approved.
Staff described the bills two most consequential features: a statewide floating homestead exemption tied to the consumer price index that would cap reassessment increases for homesteaded properties, and authorization for a new local option sales tax (similar to LOST) that jurisdictions could place on the ballot only if they participate in the floating homestead exemption. Strickland noted the law includes an opt-out provision: local governments must decide whether to participate by March 2025 if the referendum passes.
"It's really complicated," Strickland said, urging staff and council to monitor the topic and prepare analysis. He said staff will run modeling and return with options for council consideration about whether to opt in or opt out. Council members asked questions about how revenue splits for any new county-wide sales tax would be negotiated; staff said those allocations would require separate intergovernmental agreements among participating jurisdictions.
The city emphasized it will not assume any permanent revenue from HB 581 outcomes in the FY25 model until details are resolved; staff also noted that some parts of the bill create options to provide property tax relief while pairing that relief with an alternative local sales tax that would require negotiation on revenue sharing.
Next steps: staff will analyze HB 581s fiscal impact and present options to council ahead of the March 2025 opt-out deadline should the statewide referendum pass.
