Monroe County Commissioners approved by a 4-1 vote on Tuesday, Feb. 18 a resolution to opt out of the statewide “Floating Homestead Exemption” that was made available for local governments in Georgia thanks to the 2024 passage of House Bill 581.
The decision came after a trio of public hearings regarding Monroe County’s proposed opt out. The Monroe County Board of Education approved on Feb. 11 also to opt out of House Bill 581 while the City of Forsyth approved on Feb. 3 to opt in to the statewide Floating Homestead Exemption.
Georgia legislators entered the 2024 legislative session concerned about rising property value assessments and property taxes in Georgia. The legislators ultimately came up with House Bill 581, a culmination of six bills, which was signed into law on April 18, 2024 pending approval from state voters in a Nov. 3, 2024 referendum. The measure, which was called House Resolution 1022, passed statewide by a nearly 63 percent to 37 percent margin and in Monroe County by a 59 percent to 41 percent margin in the Nov. 3, 2024 referendum.
House Bill 581 features a statewide Floating Homestead Exemption for all local governments: counties, cities and school boards. The Floating Homestead Exemption, which establishes that the taxable value of a home may only increase at a rate of inflation each year, is designed to offset increases in taxable value to property. Non-homesteaded property, such as commercial or rental, will continue to be valued at fair market value. Ga. Rep. Clint Crowe, a real estate agent who represents the northern end of Monroe County, was one of the sponsors of the bill.
The bill took effect statewide on Jan. 1, 2025, meaning all local governments in Georgia were “opted in.” However, local governments had the chance to opt out as long as a resolution to opt out is adopted and filed to the Georgia Secretary of State’s office by March 1, 2025. About 70 to 80 percent of Georgia’s school districts are expected to opt out.
If Monroe County had not opted out of the Floating Homestead Exemption, a new sales tax, a Floating Local Option Sales Tax (FLOST), could have been created to offset revenue losses related to the Floating Homestead Exemption and would have allowed a one percent sales and use tax to be used for property tax relief for up to a five-year period. The FLOST, which must be approved via local referendum, would have increased the county’s sales tax from eight cents per dollar to nine cents per dollar. While Monroe County and the City of Forsyth could have received FLOST monies through an Intergovernmental Agreement, the Monroe County Board of Education would have been ineligible to receive FLOST funds without a Constitutional amendment because it already imposes an Education Local Option Sales Tax (ELOST).
Following Tuesday’s Board of Commissioners meeting, the Georgia House of Representatives passed House Bill 92, also co-sponsored by Crowe, which extends the final opt out date for Georgia’s local governments to March 31, 2025. However, the measure must also pass in the Georgia State Senate and be signed by Gov. Brian Kemp before House Bill 92 can become law. It is not yet known whether it will pass in the Senate and signed into law prior to the previously decided upon opt out date of March 1, 2025. There was initial conversation in the Georgia House about extending the opt out date to March 31, 2029, so that local governments could opt in initially and decide after several years whether House Bill 581 is working for their jurisdiction. However, that four-year extension was not included in the final bill approved by the Georgia House on Tuesday. County Manager Jim Hedges said among the major proposed changes that are included in House Bill 92 are that floating homestead would be limited to no more than five acres of immediately surrounding land and that a surviving spouse may continue the floating homestead exemption without reapplying.
All five Commissioners made public comments prior to the final vote on House Bill 581.
Commission Chairman Alan Gibbs said no one knows how House Bill 581 will affect local governments long-term. He said although Commissioners have estimated a revenue loss of as much as $12.2 million 20 years from now if Monroe County had opted in, he said those projected numbers are not accurate because they don’t consider factors like continued new growth.
District 1 Commissioner Lamarcus Davis said he doesn’t feel comfortable locking Monroe County citizens long-term into a state law that was still being changed even while Tuesday’s Board meeting was taking place. Commissioner Davis said House Bill 581 was not going to cut property taxes as much as shift the tax burden onto rental property owners and commercial businesses. He said many of the Monroe County citizens with whom he spoke who had voted in favor of House Bill 581 did so because they erroneously believed that Monroe County’s $12,000 Homestead Exemption would be eliminated if House Bill 581 failed. Commissioner Davis said several other Middle Georgia county governments have either already opted out of House Bill 581 or intend to do so prior to the March 1 deadline.
District 3 Commissioner John Ambrose said even large city governments in the state, such as Atlanta and Savannah, have opted out of House Bill 581. Commissioner Ambrose said he’d rather watch and see how the bill affects other Georgia counties for a year or two before committing Monroe County to opting in. He said Monroe County can always petition the Georgia General Assembly later to opt in if House Bill 581 proves successful. Commissioner Ambrose said he’s in favor of freezing property taxes on seniors 65 years and older unless they make major improvements to their home.
District 4 Commissioner Al Turner said he wants to do what is best for Monroe County as a whole and asked Chairman Gibbs whether he thinks opting out of House Bill 581 does that. Chairman Gibbs reiterated his prior statement that the effect of the bill is unknown and said he was still undecided on his final vote on the bill even after all of the discussion over the past several months.
District 2 Commissioner Eddie Rowland agreed with Chairman Gibbs that the long-term financial numbers the county has provided regarding House Bill 581 might not be accurate. Commissioner Rowland said it’s not because the math isn’t correct but because there are so many variables that could occur over the next several decades that the long-term effect cannot possibly be computed at this point. Commissioner Rowland said he hasn’t been fighting the bill over the last several months but instead has been putting weeks of work into trying to understand it. He said he thinks state legislators had good intentions with the bill and is confident that they will continue working to find something that will help Georgians pay lower property taxes. Commissioner Rowland said he’d prefer a simpler bill that freezes property taxes for all homeowners until a home is either improved or sold. Commissioner Rowland said if state legislators aren’t able to come up with an adequate solution for property tax relief by the end of this year’s General Assembly, he vowed to spearhead the creation of a local plan to reduce the property tax burden on Monroe County homeowners, particularly seniors.
Commissioner Davis later chimed back in, saying he disagrees with Commissioner Rowland’s conciliatory remarks about state legislators’ decision to impose House Bill 581 on local governments. Commissioner Davis said he feels like the bill was shoved down local officials’ throats and said 60 days was not a sufficient timeframe for Commissioners to decide on something that could have long-ranging effects on the county’s future success.
After about 15 minutes of discussion, Commissioner Ambrose motioned to approve a resolution for Monroe County to opt out of House Bill 581. Commissioner Ambrose’s motion was then seconded by Commissioner Davis and approved 4-1 with Chairman Gibbs the lone dissenter. Chairman Gibbs said he ultimately voted against the measure because he’s confident that continued commercial growth in Monroe County will alleviate some of the concerns about the county’s future finances.
