Spalding County leans toward homestead-only sales tax to reduce property bills

County commissioners at a June 1 workshop signaled they will move forward with a proposal to ask voters whether to adopt a local homestead option sales tax (LHOST) to reduce property taxes, after staff outlined how LHOST differs from a floating local option sales tax (FLOST) and how House Bill 581 affects taxable-value growth.

Dr. Led Better, the county manager, told the board that FLOST applies a sales tax broadly to lower the millage rate for all property owners, while LHOST uses a 1% sales tax to fund a homestead exemption that targets relief to homeowners. "FLOSS allows a sales tax of up to 1% to be used to lower the property tax rate," Dr. Led Better said, and "LHOST … reduces the taxable value of a home and lowers the homeowner's tax bill." He warned that FLOST revenue splits negotiated with cities can produce a funding mismatch: "Spalding County is responsible for about 93% of the homestead tax base while the city accounts for about 6 and a half percent," he said.

Why it matters: Commissioners said they seek a policy that provides real, visible relief to homeowners without undermining the county’s ability to fund public safety, roads and other services. Staff noted House Bill 581 ties homestead taxable-value increases to inflation (CPI-U), limiting revenue growth and making it harder for counties to rely on assessment increases to offset the cost of services.

Board discussion focused on who benefits and how soon residents would see relief. Staff said if a referendum is placed on the November ballot and voters approve, collections would start Jan. 1, 2027, with partial relief possible in late 2027 and full-year reductions appearing on 2028 tax bills. Commissioners asked how much an individual homeowner might save; staff said it depends on local values and the final allocation but offered a rough, illustrative example discussed in the workshop (a speaker summarized an informal "60% reduction for homesteaded properties" scenario) and cautioned that the county would still face a budget gap the penny would not fully cover. One commissioner said the county could be left about $5.5 million short under some scenarios and noted that would require either service cuts or higher millage elsewhere to compensate.

Commissioners also discussed term length and rigidity: once voters approve FLOST or LHOST the electorate’s choice and the ballot language determine the duration. Board members explored options shorter than statutory maximums and material constraints around switching programs; staff said statutory timing and the General Assembly's role make the timing and ballot construction critical.

Several commissioners said they were leaning toward LHOST because it more directly aligns revenue distribution with where homestead tax burden exists. "The LHOST to me looks like it'd benefit the county better," Commissioner Reginal Watts said. The board directed staff to prepare the necessary legislative language, intergovernmental notifications and ballot materials for the vote that evening and to return with specific revenue and millage-rate scenarios for public distribution.

What happens next: Staff will draft legislation, run timing and implementation schedules (including the required newspaper/publication notices and coordination with the county’s legislative delegation), and provide detailed fiscal estimates and projections for commissioners and the public before the formal vote.