The Henry County school board voted 5-0 on Monday night, February 10, to opt-out of the HB 581 statewide floating homestead exemption. The opt-out follows three sparsely-attended public hearings on the topic in January.
Henry School Board HB 581 Opt-Out
House Bill 581, approved by state legislators in 2024 and subsequently ratified by voters in November, was intended to cap homeowners’ annual tax increases. The measure created a floating homestead exemption, which would limit a homeowner’s annual property tax bill to increase no more than the inflation rate.
The Henry County school board’s decision to opt-out of HB 581 means the status quo will continue for Henry County homeowners and their tax bills. This is because the county government already has a frozen exemption limiting tax increases on the county commissioners’ portion of the tax bill. The school board receives about 60% of property tax revenue in Henry County.
Homeowners within city limits may see tax savings on city taxes, based on each city’s decision to remain in HB 581 or opt-out. Hampton and McDonough have announced HB 581 hearings for later this month.
The school board opted-out because they believe the homestead exemption’s compounding effect year-to-year would limit the district’s ability to function. The district estimates the exemption would reduce tax revenues by $3.4 million in 2025, $7 million in 2026, and $11 million in 2027. These numbers are not a reduction in existing revenue, but instead, a reduction in forecasted additional revenue.
Board Vice-Chair Annette Edwards thanked the district staff for their presentation and explanation of HB 581. “Thank you for doing such a great job explaining what this would mean to our system if we did not opt-out. I need the public to know that the system would be highly affected if we did not choose to opt out of this.”
Henry County Schools Presentation
According to Henry County Schools, 22% of the county’s tax digest is presently exempt from school taxes. The school board’s decision to opt-out does not affect the existing exemptions. Henry County ranks 3rd in value of exemptions offered, compared to the 10 largest school districts in Georgia, according to the district. The general exemption saved each homeowner $80 in 2024.
In addition, the district has larger exemptions for senior citizens. The senior exemptions start at age 62. They increase at ages 65 and 68, before a 100% exemption applies at age 70. A little over 10,000 homeowners receive the senior exemption in Henry County. It is worth noting the HCS senior exemptions have no income cap. Several other counties in Georgia have an income requirement to receive the senior tax exemption.
Henry County Schools has opted out of the new exemption because of the exemption’s financial impacts. According to the district, the impacts include:
- Lost (or foregone) revenue would restrict HCBOE’s capacity as an educational service provider and employer
- Over time, trade-offs would be required between advancing competitive pay and increasing size of the workforce for services (e.g., higher teacher pay and larger classes or vice versa)
- Responsiveness to county growth or elevated student needs would require reduction or elimination of services and/or support
The district’s full presentation is below. The district’s original press release is also available here.
School Districts Opting-Out Across Georgia
Henry County Schools is not alone in opting-out of HB 581. According to The Henry Reporter research, over 100 school districts are considering opting out.
At the time of publication, our research has found five school districts which opted out. Many others are likely to follow before the March 1 deadline. House Bill 92, being considered now in the 2025 legislative session, would extend this deadline to March 2029.
Featured image shows the Henry County school board voting on February 10, 2025. Henry County Schools video.
