NEWTON COUNTY – The Newton County Board of Education recently discussed whether to opt in or out of the recent passing of House Bill 581 and what that means for the school system during their meeting on Dec. 17. This bill provides a statewide homestead exemption, but may have unintended consequences for the school district.
Known as the “Save Our Homes Act,” this bill was passed to address issues related to local property tax. It is designed to limit the annual increase in the taxable value of a home by capping it at the rate of inflation. An example of this in action would be if a home value increased by 10 percent, but the inflation rate for the previous year was 2 percent, the taxable value of the home would only increase by 2 percent.
However, local bodies such as the school board have the flexibility to opt in or out of this exemption and the decision would remain permanent.
According to a presentation by Erica Robinson, CPA chief financial officer of Newton County Schools, in Newton County 59.98 percent said yes to this bill and statewide it was 62.92 percent. Because more than half the community said yes, the board has heavily debated this bill.
While the exemption is designed to limit the annual increase in taxable property value, it also results in a reduction of anticipated revenue for the school district. The estimated revenue impact with assumption that inflation rate is 2 percent, slow growth digest model is at 10 percent and millage rate is constant at 15.750 mils would be a loss $3.9 million during 2026, its first year of implementation. By 2029 the loss would be $11.6 million.
This bill would have a significant impact on the district's budget with a total revenue loss of $30.6 million from 2026 to 2029. This would cause the district to have difficulty achieving a competitive pay structure resulting in lowered retention rates, delayed maintenance and upgrades to school facilities and pressure to raise the millage rate.
“This creates a challenging environment as we strive to balance the needs of our students, staff and community with the available financial resources,” Robinson said.
While the board debates whether to opt in and out, they highlighted several key steps that have been taken to try and provide property relief and lower school taxes. The board has steadily decreased the millage rate by 4.038 mills over the past five years and has increased the senior homestead exemption from $30,000 of assessed value to $50,000.
Trey Bailey, district 1 representative, noted that this is a “difficult situation.” While Bailey noted the board’s commitment for providing tax break for the community, but there are unintended consequences for schools. He said that they would have no way to recover the amount of revenue lost.
“I would say what good is it to save our homes and lose our children,” Bailey said.
Because of this, Bailey requested that the board consider opting out of the bill and asked the community to understand the ramifications.
“I desperately want to see our homeowners get a tax break,” Bailey said. “I’m just not sure this is the best way to do it, not when it affects our public school system.”
Superintendent Dr. Duke Bradley III emphasized that this would be a permanent structure and because of this it adds another layer of difficulty for the board to decide whether to opt in or out. Bradley reiterated that the board has taken great strides to provide relief to homeowners and noted that the board will continue to contemplate and ultimately decide which direction to take with the bill.
