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T-U School System House Bill 581/House Resolution 1022 Frequently Asked Questions

What is House Bill 581?

House Bill 581 was passed by the Georgia General Assembly during the 2024 legislative session, signed into law by Governor Kemp on April 18, 2024, and approved by a majority of GA voters during the general election in November 2024. Once signed into law, HB581 became House Resolution 1022. For the purpose of this FAQ, we will refer to it as HB581. HB581 has three major components: 1: Provides for some procedural changes to property tax assessments and appeals; 2: Provides for a new statewide homestead exemption that applies to local governments unless the local government opts out; 3: Creates a new local option sales tax available to be used for property tax relief. This additional sale tax option is allowed only for county and city governments, not school districts.


What kind of homestead exemption is provided under House Bill 581?


House Bill 581 provides a floating exemption that adjusts each year to cover the diQerence between the original base- year value of a home and its current market value, ensuring the home’s taxable value does not increase. The base year value is adjusted annually by a percentage equal to either a set rate or the inflation rate that occurred during the prior year. This approach eQectively “floats” to limit the assessed market value of a home each year, though the millage rate may still rise.


How does HB581 a<ect local school districts?


HB581 gives power to the General Assembly over the way the school districts manage a vital funding source by setting exemption limits. School districts have only two locally controlled revenue streams, property taxes and Education Special Purpose Local Option Sales Tax (ESPLOST). Education Special Purpose Local Option Sales Tax funds are restricted in use by the voter approved referendum and cannot be used to pay for salaries & benefits.


How much does property tax revenue generate for Thomaston-Upson Schools?


The Thomaston-Upson School System receives approximately 26% of its total school funding from property taxes (after paying a 2.5% collection fee to the Upson County Tax Commissioner.) By capping valuation increases to the previous year’s rate of inflation, this limits the amount of property tax revenue the school district receives unless the school district raises the millage rate. School districts can only raise the millage rate 2-mills at a time with a 20-mill cap. At 13.6 mills, Thomaston-Upson School System continues to have one of the lowest millage rates in the surrounding area and state even with an extremely limited new housing, commercial, and industrial tax base.


What impact would the constitutional amendment have on Thomaston-Upson Schools if tax year 2018 was the base year for HB581?


If the amendment were in eQect six years ago with 2018 as the base year, Thomaston-Upson Schools would have cumulatively lost $1,833,137 in property tax revenue. While property values rose, so did the cost of salaries, benefits, transportation fuel, utilities, and other expenses. The final column in the table below details the mill equivalent that would be needed to recoup the lost property tax revenue.


Will the Quality Basic Education (QBE) local five mill share contribution increase for Thomaston-Upson Schools?


Yes, by opting in to HB581, Thomaston-Upson Schools will be required to increase its local five mill share contribution (5-mills of property tax) thus reducing how much Thomaston-Upson Schools receives from the QBE funding allotment. Thomaston-Upson Schools currently receives 67% of its funding from QBE.


Will the QBE Equalization funding Thomaston-Upson School System receives be impacted?

Yes, there will be impacts to the QBE Equalization funding. Equalization funding is based on the value of the district’s tax digest as compared to the entire state of Georgia’s property wealth. Thomaston-Upson Schools received $4.6 million in equalization funds in FY2025.


Does the constitutional amendment include a provision for Thomaston-Upson Schools to impose a Floating Local Option Sales Tax (FLOST)?


No. The constitutional amendment does not include a provision for school districts to impose a FLOST. This eQectively blocks school districts from generating new revenue to meet rising costs.


How would Thomaston-Upson School System opt out of the HB581 homestead exemption?


School districts seeking to opt out of the HB581 homestead exemption must advertise and hold three public hearings of intent to opt out, pass a resolution opting out, and file the resolution with the Secretary of State. The process may not begin until the eQective date of the bill on January 1, 2025, and must be completed by March 1, 2025.


Can the HB581 floating homestead exemption be repealed at a later date?


There are currently only 2 options for school districts: opt out by March 1, 2025, or accept the floating homestead exemption permanently.


If T-U School System opts out of HB581, will the local school tax homestead exemptions already in place for ages 62 and older be a<ected?


No. Local school tax homestead exemptions will not be aQected. These exemptions will remain in place.


How can local school districts compensate for the loss of funds?


School districts are particularly vulnerable under HB581, which caps property assessments but does nothing to limit the growth in the cost of providing essential services and a quality education. Rural and low-income districts, which rely heavily on property tax revenues, will be particularly aQected. These districts already face limited tax bases and a smaller pool of taxable property. School districts like Thomaston-Upson that have maintained a low millage rate will find it even harder to meet their financial needs. The funding gap could force school districts to either cut services, reduce staQ, or increase the school millage rate.


What short- and long-term budgetary needs could be at risk if Thomaston-Upson School System does not opt out of HB581?


  • Facilities: General maintenance and upkeep of facilities are essential to ensure T-U students have a safe environment in which to learn. In addition, our schools are aging. Upson-Lee Middle School, our oldest school, is currently 42 years old and will need major renovations or replacing within the next 10-12 years. While there is capital outlay funding available, funding available does not provide for 100% of renovation/construction costs. Current estimated construction costs are $90,000,000 to $100,000,000.


  • Teacher Retention: Maintaining competitive salaries and providing teachers with the professional development/training and resources they need to be successful


  • Safety & Security


  • Technology


  • School Buses: New buses cost $150,000. Fourteen passenger buses cost $90,000. Bus vendors are projectingan 8% increase each year.


  • Fuel Storage and Tank Island replacement: estimated costs of $300,000 - $500,000.


  • Student Services: essential physical, emotional & behavioral resources & supports

 

Is there a sunset provision for the constitutional amendment?


Currently, there is no sunset provision for the constitutional amendment.



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