NEWTON COUNTY – The Newton County Board of Commissioners met Thursday, Jan. 16 to have a work session about House Bill 581 (HB581).

HB581, also known as the Save the Homes Act, was passed by the General Assembly last April and voted into law by Georgians in November. It enacts a floating homestead exemption, which, in essence, freezes homeowners’ property taxes at a fixed rate for future years (with certain stipulations and exemptions).

Newton County voters were mostly in favor of HB581 during the November election, with 56.75 percent voting ‘yes.’

However, each governmental entity has the option to opt out of the bill.

For Newton County, this includes the Board of Commissioners, Board of Education and all of the local city governments; including Covington, Oxford, Porterdale, Newborn, Mansfield and Social Circle must decide on whether to opt out or not. The deadline to opt out is March 1.

At Thursday’s work session, the board heard a presentation from attorney Aaron Myers, who ran through the specifics of the bill and informed the board – as well as the approximately 30 citizen attendees – as to the pros and cons of opting out of the legislation.

Across municipalities, the public official perspective seems to be one that recognizes that without increasing property tax income each year, the local governments will have to find some other way to bring in funds for their budgets each year. Whether that be through increasing the millage rate, introducing a penny tax – both of which were discussed as real possibilities by the commissioners – or some other adjustment, the tax burden on citizens likely will not be eliminated or even significantly reduced in the long run, just shifted.

“The whole thing is smoke and mirrors to me, this House Bill,” said LeAnne Long, District 5. “And when I say that, I mean that you're going to take it from one side, then you’re going to get it back from people on the sales tax side.”

Based on a future projection shown by Martie Kinard, the county’s chief appraiser, with the homestead exemption in place for the next three years, Newton County would lose an estimated $4.7 million in revenue.

“The policy benefit of this is this is a great way to encourage people to put down roots and stay in Newton County,” Myers said. “It recognizes that people who have been part of the community for a long time, they’ve paid their dues, they’ve paid for this infrastructure that we’re enjoying, so they pay a little bit less of a share of the taxes going forward.

“Because there’s no such thing as a free lunch, the tradeoff you make is we are freezing taxes for some people and for some properties, but we’re not really affecting how much things cost, and as a county government, you’re a very large employer in the county. You’ve got a lot of employees, and their cost of living continues to rise.”

The county does have a proposed alternative - the new Floating Local Option Sales Tax, or FLOST. The FLOST would make up county income lost in the homestead exemption through the implementation of a sales tax.

According to Myers, if the taxpayers are willing to transfer a portion of the property tax burden into a sales tax burden, every dollar that comes in from the FLOST sales tax automatically gets rolled back into property taxes. This is similar to how many city property taxes already work.

“If you like the idea of a floating homestead exemption but you don’t like the idea of the millage rate going up in the future, the FLOST is the option, that’s the remedy,” Myers said.

However, the stipulation with implementing the FLOST option is that, in order for any community or jurisdiction to implement the FLOST, every local government that levies the tax must have a floating homestead exemption in place. All of the city municipalities in the county must remain opted in to the homestead exemption. If even one city in the county opts out, the county and other jurisdictions cannot implement the FLOST.

“With the FLOST, I don’t understand what competitive disadvantage that may put our businesses in, should counties next to us not decide to do the FLOST or the float exemption,” said Stan Edwards, District 1.

Commissioners Long and Henderson also emphasized the need to pay attention to the senior citizens of the county.
 
If the board wants to opt out of the bill, they must hold three public hearings. The dates for these have not yet been made available.