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Lumpkin schedules hearings on House Bill 581 after attorney warns of lasting tax shift
Summary
The Lumpkin City Council voted Jan. 2 to schedule three public hearings on House Bill 581 after Attorney Coleman told the council the bill could freeze homestead assessed values and shift property-tax burden to businesses and rentals; any opt-out must be filed with the Secretary of State by March 1.
The Lumpkin City Council voted Jan. 2 to schedule three public hearings on House Bill 581 after Attorney Coleman told the council the measure could materially reduce city tax revenue and shift the burden to businesses, agricultural land and rental properties.
"It does not affect the home exemption that is currently in effect," Attorney Coleman told the council, explaining the bill would add a second homestead freeze that "would freeze the property value until the home is sold." He said the bill includes a FLOST (local sales tax) mechanism estimated at about "half a cent to one cent for five years" to provide tax relief but warned that the sales-tax funds could not be used for police cars or equipment and that the long-term effect would be revenue loss for small, rural cities.
The council—by motion of B. Cullefer and seconded by N. Seay—voted 5-0 to schedule the three hearings required if the city decides to opt out. Attorney Coleman and staff emphasized that holding hearings does not bind the council to opt out; a later resolution would be needed to finalize an opt-in or opt-out decision, and any opt-out must be submitted to the Georgia Secretary of State by March 1.
Clerk Anne Holloway asked whether the city is already at its highest millage rate and how lost revenue would affect city funds. Attorney Coleman replied that a small city like Lumpkin could not easily recover the lost tax digest revenue and that the FLOST revenue, as described, would not flow to schools. He warned, "Taxes do not disappear. They only shift to all other property types—industrial, agriculture, businesses, and rental properties. It will have an enormous impact on revenue in the later years."
Council members noted the compressed timeline: the bill took effect Jan. 1, 2025, and the council must decide whether to conduct the hearings and later pass a resolution on opt-out status. The council scheduled the hearings to give residents an opportunity to comment before any resolution is adopted.
Next steps: The city will hold the three public hearings advertised as required by statute and then return to the council for a resolution that would either opt the city out of HB 581 or allow the new exemption to remain in place.
