Updated Feb. 4 to clarify that the school boards can opt out of HB581 without it affecting the availability of the FLOST as a measure for other local entities to enact.

House Bill 581 – or HB581 – was a ballot measure across the state of Georgia in the November 2024 election. Also known as the “Save the Homes Act,” the bill was passed by the General Assembly last year and will take effect across the state in March 2025. 

About 63 percent of the state voted in favor of the measure, passing it. In Newton County,  voters were 59.98 percent in favor of the bill.

However, the passage at the statewide level does not force it into effect in every county. Every local government entity is allowed to opt out of the bill, but they must choose whether or not to do so by March 1, 2025.

What is the bill offering?

At its core, HB581 is a floating homestead exemption. This means that people who own residences across the state can receive a tax break. Whatever their property taxes are valued in 2024 will remain constant so long as they live at and own the property (with a few stipulations as detailed below). 

The state’s House Budget and Research Office prepared a flier in July 2024 that details much of the bill. It says:

“HB 581 provides a statewide “floating” homestead exemption that will limit annual assessment increases on a homesteaded property to the rate of inflation.”

Each year, the Georgia Department of Revenue will set the rate of inflation based on the consumer price index. One’s property tax will rise only with inflation until the house is sold to a new owner — in which case a new tax assessment will be conducted — or if substantial changes are made to the property. 

So, if someone’s property was assessed for value in 2024 and then in 2026 the owner builds an entire cottage adjacent to the home, the property would warrant reassessment because there has been a substantial change made to its value.

This offers homeowners a significant break. For some, property taxes may feel like signing a blank check every year and hoping for the best. This would create a degree of tax certainty for homeowners, ensuring they can anticipate the coming years’ tax cost more reliably.

What local entities does this apply to?

In and around Newton County, all of the following bodies must go through the process of choosing to stay with or opt out of HB 581:

Newton County Board of Commissioners (BOC)

Newton County Board of Education (BOE)

Social Circle City Schools*

City of Covington

City of Oxford

City of Porterdale

City of Social Circle*

City of Mansfield

Town of Newborn

*Social Circle has portions of the city located in Newton County.

Why would local entities want to opt out?

The biggest issue that most of the the local governments have raised in their respective work sessions and meetings is that freezing property taxes cuts homeowners a nice break but could seriously dent projected tax revenue. Various projections from the different meetings estimate millions of dollars of deficit in the years to come. 

For instance, the Newton County BOE estimates a revenue loss of over $30 million by 2029. They foresee that the repercussions of this could affect class sizes, staffing and employee retention and facility maintenance. Similar reverberations would be felt across the county and cities with such significant revenue losses.

Many of the boards/councils share these concerns over such a hefty income loss, and note that they would have to implement other measures to counter it and avoid running into the ground. 

However, this is not necessarily a dealbreaker, as some entities believe they will be able to work around the projected loss. One commonly mentioned solution would be to raise the millage rate, but some appear to be disenchanted with the idea, believing the citizens would dislike it greatly. 

However, the state prepared for these financial concerns and offered a solution: FLOST.

What is the FLOST?

The state-offered savior of HB581 is a Floating Local Option Sales Tax, or FLOST. But the FLOST does not come easily — it is a measure that can only be implemented if all of the previously named local municipalities agree to remain opted into the bill. The school boards are exempt from this measure, so they can opt out without it affecting the FLOST availability for the region.

Implementing a FLOST appears to be the state’s acknowledgment of the deficit and suggested means to counter it in a way that tries to affect an entire region as equally as possible. If one city implements another sales tax and its neighboring city does not, businesses will face the repercussions.

To keep that competition from emerging, every community’s governing body is required to align their plans and remain opted in together in order to have the FLOST. If even one of the cities were to opt out, the state’s FLOST is no longer an option for anyone in the county to implement. 

Even if the FLOST was secured in a unanimous decision, like any other optional sales tax, the public would still have to vote it into effect.

How do local entities opt out?

Every government entity has the option to opt out of the bill. If they wish to opt out, they must declare so to the state by March 1. An entity cannot opt out without holding three public hearings on the matter and then passing a resolution. 

When planning the public hearings, the entities must advertise them in the local newspaper (The Covington News), and the wording is legally required to say that the body is declaring its intent to opt out. But since the hearings are a necessary step in opting out, many groups are moving ahead and holding the hearings even though they have not technically decided if they are going to remain opted in or opt out. 

The governing groups can hold all of the hearings and then choose to remain opted in anyway. But if any group does not act on the bill by holding the hearings and passing a resolution, they will automatically remain opted in to the homestead exemption. 

Several of the groups have already held work sessions discussing the bill and even begun holding the required public hearings. 

• The BOC held a work session on HB581 on Jan. 16 but has not announced any public hearings as of now. At the board’s Jan. 29 meeting, at least four commissioners indicated they are inclined to allow the bill to take effect in Newton County. Despite this sentiment, the board has not formally released a decision, and it is unclear if they will go ahead and hold the public hearings for the sake of public input

• The BOE held its first public hearing on Jan. 21 and its second was on Jan. 29. The final one is on Feb. 5 at 4 p.m. at the BOE building.

• The city of Covington has public hearings scheduled for Feb. 10 at 10 a.m. and Feb. 17 at 10 a.m. and 6 p.m. Meetings will take place in the Council Room at 2116 Stallings Street, Covington.

• The city of Oxford held its work session on the matter on Jan. 21 via Zoom. Their public hearings are scheduled for Feb. 3 at 6:30 p.m. and Feb. 17 at 10 a.m. and 6 p.m at Oxford City Hall. The final hearing will be followed by a special called meeting where the council will determine if the city is opting out or not.

• Porterdale has not released any information on HB581 specifically yet, but the city has a regular council meeting scheduled for Feb. 3 at 6:30 p.m. One agenda topic is to “consider the approval of scheduling 3 Public Hearings for HB581.”

• Social Circle is set to hold its first two public hearings on Feb. 6 at 11 a.m. and later at 6:30 p.m. The final hearing will be on Feb. 18 at 6:30 p.m. The meetings are held in the Community Room at 138 E Hightower Trail, Social Circle.

• The city of Mansfield said on Facebook that they have no plans to opt out of the bill.

• All three of Newborn’s public hearings will be held at the Newborn Town Hall. They are set for Feb. 3 at 6:30 p.m., Feb. 14 at 10 a.m. and Feb 24 at 6:30 p.m.