No, the House Bill 581 Floating Homestead Exemption that was on the ballot in November 2024 is a separate statewide exemption from existing homestead exemptions. If the school board were to opt out of the HB 581 Floating Homestead Exemption, it would have no effect on existing exemptions, including the senior exemptions already approved and enacted by the school board.

Unfortunately, the advertisement the school district was required to post contains potentially confusing language. The advertisement reads “OPT OUT OF HOMESTEAD EXEMPTION”. That does not mean ALL homestead exemptions, only the HB 581 Floating Homestead Exemption that was on the ballot in November 2024. Existing homestead exemptions are NOT impacted, even if the Board of Education decides to “opt out”. This specific language was required by the law and was not the school district's choice.

If your children attended public schools, the cost likely was subsidized by other taxpayers, including residential and non-residential property owners. Think of it like roads, police, or fire departments—you may not use them every day, but they exist for everyone's benefit.

Good schools help create a well-educated workforce, which attracts businesses and improves the economy. A strong school system helps keep crime rates lower and property values higher, benefiting all residents.

Areas with good schools often have higher property values, meaning your home is worth more because people want to live in a community with strong schools.

There are several unique characteristics of Paulding County's economy that would mean the new floating homestead exemption could have a more significant financial impact on our schools.

Fast Growth: Paulding County is one of Georgia’s fastest-growing school districts (8th fastest-growing large district, 11th largest overall). The new floating homestead exemption would place a cap on property valuation increases limited to a percentage determined by the state - most likely the statewide inflation rate. In counties such as Paulding where the enrollment growth rate might exceed the statewide inflation rate, the floating homestead exemption would make it difficult for those school districts to provide the educational services needed to match new growth.

Limited Commercial Tax Base: Only 14 percent of Paulding County’s tax digest comes from commercial properties, compared to an average of 35 percent in neighboring communities.

Unbalanced Tax Base: Unlike neighboring communities such as Bartow County, which has a near-balanced digest (52 percent residential, 48 percent commercial) and Cobb County (70 percent residential, 30 percent commercial), Paulding County’s tax digest has become increasingly unbalanced, shifting from 80 percent residential five years ago to 86 percent residential today.

Greater Dependence on Local Revenue: In Fiscal Year 2019, 30 percent of Paulding County’s revenue came from local sources; today, that number is 38 percent, despite having fewer options to increase funding.

Paulding County relies heavily on residential property taxes (in Paulding 86 percent of the tax digest is residential and just 14 percent commercial, compared to an average of 65 percent residential and 35 percent commercial in neighboring districts). The Board of Education cannot adjust home values, control residential growth, or change the county's limited commercial tax base. Since the new exemption caps taxable values, it could disproportionately impact school districts that are growing at a faster rate than the cap limit. Paulding County is the 11th-largest school district in Georgia and has seen a 7.1 percent enrollment increase over the previous five years, so the exemption could create a long-term funding challenge.

The new exemption also would reduce PCSD's capacity to fund local initiatives that support our students and staff, making it more difficult to address critical or emerging needs without relying on additional state or federal assistance. Two examples:

· The school district has spent approximately $12 million LOCALLY on Safety & Security over the last three years. The state funded $1.5 million during the same period, in addition to one-time security grants.

· Another example of a locally funded initiative is compensation. To maintain the most skilled and qualified workforce possible, the district must remain competitive in compensation.

According to the law, the Board of Education has a one-time opportunity to opt out, with a deadline between January 1, 2025 and March 1, 2025. If the school district does not opt out, future school boards cannot revisit this decision. The exemption would then be permanent and difficult to modify later.

Yes. It is important to note the floating homestead exemption does not account for substantial changes in the property. For example, if a homeowner adds on to the square footage of the house, then the base-year value may be increased, regardless of a limitation. Thereafter, a new base-year value is created and the new value receives the benefit of the exemption.

It is also important to note that this is called a "floating" homestead exemption because property valuations would change year to year (float) based on a state-determined factor such as the statewide inflation rate. This exemption does not stay with the property, nor the property owner, when a change in ownership occurs. If an individual sells their home, the taxable value of that home resets to fair market value for the next owner. Similarly, the individual cannot carry the value of the exemption to their new home.

If local revenue does not keep up with school costs, the school board may need to consider a millage rate increase to maintain services. Unlike cities and counties, school boards are limited to a maximum millage rate of 20.00 mills. Paulding County Schools' current millage rate is 17.675 (the lowest rate in 18 years), which leaves little room for increases without a local referendum.

Creation of a permanent state-controlled exemption: Future Boards of Education would not be able to reverse the decision if funding challenges arise.

Increased Dependence on State Funding: HB 581 could make Paulding County more vulnerable to state funding shortfalls.

Inability to Respond to Economic Downturns: The exemption limits how much property values can recover after a recession, restricting local revenue.

Rising Costs Outpacing Revenue Growth: Expenses like insurance, fuel, school security, and bus purchases are rising faster than inflation, which is what the exemption is tied to.

Yes, there would be an impact. The law approved last November included a provision allowing cities and counties to implement a new Floating Local Option Sales Tax (FLOST) if they choose to opt in to the new floating homestead exemption and local voters approve. So, while property value increases would be capped for our cities and county, the local sales tax would increase by one cent if voters approve. The law states, however, that collections from a FLOST would be available only to city and county governments, but would not be available to school districts. If a FLOST is passed by Paulding County voters, the local sales tax would increase by one cent. The increased sales tax could incentivize Paulding citizens to shop in other counties with lower sales tax rates. The result could be a reduction in the school district's E-SPLOST collections. Senior citizens (who are fully exempt from property taxes) would still pay the sales tax, effectively subsidizing property tax relief for others.

The statewide floating homestead exemption is designed to help regulate property tax increases during periods of exceptional growth in property values. However, it could limit or delay the school district’s recovery from economic downturns or a depressed real estate market, as seen during the Great Recession.  This might significantly impair the fiscal stability and operations of the school district.

As drafted, HB 581 allows for adjustments to the ‘base value’ or ‘adjusted base value’ in only two circumstances:

1. Property Changes: The ‘base value’ or ‘adjusted base value’ may decrease if part of the property is removed, sold, damaged, or destroyed after the base has been established.
2. Statewide Inflation Index: The State Revenue Commissioner determines an annual statewide inflationary index rate, which accounts for both inflation and deflation. For example, if a home’s ‘base value’ is $300,000 and the inflationary index rate decreases by 2%, the ‘base value’ would adjust to $294,000.

However, in alignment with current practice, the Paulding County Board of Tax Assessors will adjust the ‘base value’ or ‘adjusted base value’ downward if the real estate market declines. However, if the new market value is higher than the existing ‘base value’ or ‘adjusted base value’, the lower value will be maintained.

No, Georgia Lottery funds are primarily used for the HOPE Scholarship & Grant Program and the Georgia Pre-K Program, not K-12 school systems.

Additional residential housing does increase property tax revenue, but without a more balanced tax digest the revenue does not fully cover the additional costs associated with the increased enrollment.

No, the Board of Education is holding three hearings to hear public input and is considering all implications of this new exemption before it makes an informed decision on whether to opt out of HB 581.

The school board will gather community feedback and carefully analyze short- and long-term impacts. No decision will be made before February 11, 2025. The Board aims to ensure the final decision aligns with the best interests of students, families, taxpayers, and the Paulding County community.