Georgia lawmakers proposed last year and voters approved a new statewide floating homestead exemption. The measure intends to protect homeowners from experiencing large increases year-to-year in their property taxes. Henry County Schools has announced three public hearings in January 2025 to consider opting out of the property tax measure.
If HCS opts out, then the floating homestead will not apply to school board property taxes. Within Henry County, the school district makes up about 60% of property taxes. The upcoming decision does not affect any existing exemptions, such as the senior exemption.
Henry County Schools Property Tax Public Hearings
Henry County Schools will host three public hearings at the following dates and times:
- Monday, January 13, at 9 am and 6:30 p.m., and
- Monday, Jan. 27, at 4:30 pm.
All three hearings will take place at the district office, located at 33 N. Zack Hinton Parkway in McDonough. Anyone may attend and share their comments.
Following the three hearings, the Henry County Board of Education may vote to opt-out of the floating homestead exemption. The recently-passed constitutional amendment provides local governments until March 1, 2025 to opt-out.
What is a floating homestead exemption?
The floating homestead exemption created in 2024 would cap homeowners’ annual property tax increases at the rate of inflation. Its intent is to prevent the 10-20% increases many homeowners experienced during the last few years. The floating homestead does not apply, however, for any local governments who choose to opt-out.
Here in Henry County, there is a frozen homestead exemption on county government taxes. It has been in place since 2004. This means a homeowner pays the same amount in county government property taxes year-to-year, even though their value may increase, if the millage rate remains the same. This is not the overall tax bill, but that portion which goes to county services like public safety. This was the case from 2017 to 2023. Instead, tax increases in those years went to either school board and / or city taxes.
This past year, in 2024, the board of commissioners approved a millage rate increase. At the same time, the school board lowered their millage rate. This caused varying effects across the county. Residents in unincorporated Henry had a net-increase in their millage rate; whereas, residents in several cities saw a net-decrease.
HCS Press Release
Henry County Schools shared their insights, why they are considering to opt-out, in the following press release:
The board’s intended action is specific to the newly authorized “floating” exemption and does not impact the other exemptions offered locally, such as the senior or veteran exemptions. In 2024, the state legislature provided a ballot option – House Resolution 1022 – that was approved and authorizes the state to set limits on the amount property taxes can increase annually, effectively setting a cap on the revenues a taxing entity can generate.
School districts have a single opportunity to opt out of the property tax cap by March 1, 2025. Failing to do so will lock districts into potentially damaging financial constraints through compounding restrictions in local property tax earnings.
“With the restrictions of House Resolution 1022 in place, Henry County Schools will not be in a position to match the growth of our community with the growth of our school district,” said Henry County Schools Chief Financial Officer Shanika Clay. “Tax collections help fund our schools relative to the financial health and growth of the community. As homes become more valuable, capping property tax revenue available to the district each year would prevent the county’s largest employer from offering competitive compensation, innovative programs, and state-of-the-art facilities suitable for a healthy community.”
Property taxes are the basis for a school district’s general fund, which supports daily operations, including teacher salaries, textbooks, instructional materials, safety and security, utilities, and maintenance. For HCS, local revenues account for 50% of the funding that is available for the district’s expenditures, and these funds are derived from the local tax digest.
In Henry County, the tax digest, or assessed value of all homes in the county, is catching up to similar sized counties.
Of the 10 largest school districts in the state, Henry County ranks ninth in the size of its digest. However, Henry County ranks third among these districts in terms of the percentage of property tax revenue exempted (presently 22% of the digest value) due to available local and state exemptions prior to House Resolution 1022.
For context, the median net digest value of the 10 largest districts was $29.8 billion in 2023, while Henry County’s digest value for this period was only $12.6 billion. With the relatively small size of the tax base and numerous exemptions already available, Henry County is at a comparative disadvantage in having access to property tax revenue to provide supports to students.
“The cap imposed by House Resolution 1022 introduces uncertainty, especially in economic downturns, as it does not protect school revenue from negative local real estate market trends. Not opting out limits our district’s ability to respond to our community’s needs, and over time would result in reductions in services our school system can provide,” said Clay.
While Henry County’s homes are becoming as desirable as similar communities in Metro Atlanta, the school district plays a key role in that desirability.
The hyperinflation of 2022 and 2023, which House Resolution 1022 is designed to target, is not the norm for Henry County. The tax digest grew by an average of 7.63% from 2014-2021, with outsized growth of 20.67% and 21.54% in 2022 and 2023, respectively, before settling back at 4.88% in 2024.
“In those years when the tax digest grew by 20-plus percent, the Board of Education strategically directed the funds to advance priorities of this community, making targeted investments in academic programs as well as safety and security,” said Clay.
These investments include a combined $42.4 million in competitive compensation, 29 elementary STEM teachers, 21 middle and high school fine arts teachers, 21 middle and high school campus safety monitors, and an additional 56 certified teacher positions. Most – if not all – of these investments would not have been possible with the restrictions now imposed by House Resolution 1022.
“Adding the House Resolution 1022 exemption to the exemptions already locally in place would create an incredibly restrictive environment, effectively taking local control from the Board of Education to appropriately use property tax revenue to offer competitive compensation, provide innovative academic and wellness supports, and much more,” said Clay.
Henry County Schools press release, January 3, 2025.
Featured image shows the Georgia Capitol and Henry County Schools district office. Clayton Carte and HCS photos.
