Bibb County school board plans to opt out of state property tax exemption

A new state constitutional amendment passed by voters last November caps property tax assessment increases, but Bibb County’s two taxing entities – the county government and school district – can decide to opt out of the cap, a process the school district has already begun.

The amendment introduced a statewide “floating homestead exemption,” an accompanying optional sales tax to offset lost local tax revenue and a handful of changes to the property tax process.

Rep. Dale Washburn, R-Macon, said the bill modernizes an “unfair and antiquated” property tax system that is based on a “confusing” assessment process.

Property taxes are calculated by multiplying the millage rate with the assessed value of property, or 40% of the fair market value. Property values are regularly adjusted via appraisals.

The floating homestead exemption limits increases on a property’s assessed value to the rate of inflation. The state already has a standard $2,000 exemption that can be used to deduct from a home’s fair market value and some municipalities have their own exemptions. 

“When tax assessments continue to go up, there’s an automatic increase in revenue, so the millage rate doesn’t have to be raised,” Washburn said. “That’s one of the complaints we have, is that people feel like they’re just sitting there getting hit over and over again.” 

Local county governments have the option to opt-out of the exemption after holding three public hearings and passing a resolution.

The school district, as one of two taxing entities in Bibb County, has until March 1 to decide whether to opt-out of the homestead exemption. Whatever decision the district makes will be locked in for the next 50 years.

Superintendent Dan Sims announced the district’s intent to opt-out of the exemption at a board of education meeting in November. His presentation noted that opting out “allows the district to maintain control over tax policies.”

At the school district’s December board meeting, Bibb Schools CFO Eric Bush presented to the board and said the district would have lost $705,374  in revenue this year under the homestead exemption if it did not opt out. Over seven years, the district would lose around $3.7 million.

The school district held the first of three public hearings Wednesday to field public comments as part of the requirements to opt-out. The meeting started around 6:03 p.m., and ended less than 10 minutes later after a brief presentation and no members of the public came up to speak.

By opting in, Sims said the millage rate could approach its 2o mills cap and put the school district into a financial bind down the road.

A local taxing entity can increase or even maintain the millage rate as one mechanism for raising funds. 

The school board raised property taxes last September by maintaining the millage rate at 14.674, equivalent to a 5% increase, raising about $4.3 million for the district.

“We want to be able to maximize funding for the needs that we have, while we appreciate all that we get from the state, from QBE formulas … the quality basic education formula is outdated, so we rely on any penny that we can get,” Sims told the Melody.

Board member Daryl Morton said taking on the homestead exemption would limit the school district’s “financial flexibility,” and because the school system relies on funding from the state, which can vary year to year, reducing revenue makes it harder to prepare “in the event of a catastrophe.”

“I think it makes the best financial sense for the system, but it (opting-out) doesn’t mean this is a green light on raising taxes on everybody,” he said.

Washburn said municipalities that opt into the exemption can enact an additional 1% sales tax, known as FLOST, that goes toward property tax rollback. 

The Bibb County school district does not have the authority to enact a sales tax, unlike Macon-Bibb County Government.

While Washburn said he doesn’t know how much FLOST proceeds would amount to, the idea behind the sales tax is to simplify property tax calculations for homeowners and move toward a more “transparent system.”

“We let the county government have too much input on the bill,” Washburn said. “We let the people who are collecting the revenue have too much input in this legislation, and giving them the right to opt-out, looking back on it, is probably a mistake.”

Following two more public hearings at the school district’s downtown office Jan. 21, one in the morning and one in the afternoon, the board will vote on whether they will opt-out of the exemption.

Other Middle Georgia counties like Monroe and Jones have already announced their intention to opt-out as well.

Macon Bibb-County is currently looking into what the exemption would mean for the county, a county spokesperson said.