Amendment On Nov. 5 Ballot Would Force Oconee School Board, Board Of Commissioners To Favor Or Oppose New Homestead Exemption

***Cities Also Impacted***

When they cast their ballots in the Nov. 5 election, Oconee County voters will confront a statewide referendum and two proposed Constitutional Amendments, one of which will require a considered response on the part of all six of the county’s governing bodies.

The first of the Constitutional Amendments provides for what is called a floating state-wide homestead exemption that will limit increases in the assessed value of property that is a homestead.

Local governments are allowed to opt out of the exemption, however, and the Oconee County Board of Education, the Oconee County Board of Commissioners, and the councils of Bishop, Bogart, North High Shoals, and Watkinsville will have to decide by March 1 if they want to not allow the exemption.

If any of these six governing bodies decides to opt out of the exemption, it must advertise and hold three public hearings on its intent to opt out of the exemption and then adopt a resolution to that effect.

The floating homestead exemption is designed to limit the effect of inflationary growth of property taxes.

The Oconee County Board of Education has relied on this type of inflationary growth to help fund the county’s schools, and this year the Board of Education was the only governing body in the county that did not fully roll back its millage rate to offset the impact of inflation on assessments.

The second Constitutional Amendment creates a state-wide Tax Court to replace the existing Tax Tribunal. The statewide referendum would increase the amount of the tangible personal property tax exemption on such things as business inventory and farm machinery.

Early voting for the Nov. 5 election starts at 8 a.m. on Tuesday and runs until 5 p.m. at the Oconee County Administrative Building, 7635 Macon Highway, just north of Watkinsville. Early voting continues at those hours on weekdays until Nov. 1 and runs from 9 am. To 5 p.m. on Oct. 19 and Oct. 26.

Details Of First Amendment

The General Assembly earlier this year passed House Resolution 1022 putting onto the ballot a request of the voters of Georgia to amend the state Constitution to authorize the General Assembly “to provide by general law for a state-wide homestead exemption to limit increases in the assessed value of homesteads.”

In fact, the Assembly already has passed House Bill 581, which goes into effect on Jan. 1 of 2025 if voters approve the Constitutional Amendment.

That bill sets up what is called a floating homestead exemption because the value of the exemption increases to offset inflation.

Properties in Georgia are taxed at only 40 percent of fair market value, and if a property has a taxable value of $100,000 in year one that increases to $110,000 in year two based on assessment, the base exemption would be that $10,000.

That exemption would be reduced, however, to allow for inflation, based on some index determined by the Georgia Revenue Commissioner.

So if inflation was 2 percent, the actual exemption would be $8,000, rather than $10,000.

The Board of Education, the Board of Commissioners, or the governing authorities of any of the county’s four cities could opt out of this exemption after holding the three required tax hearings.

Benefit Of Opting In

House Bill 581 also changes the way counties can levy sales taxes.

At present, a county can levy only a 2 percent sales tax, and Oconee County has both a 1 percent Local Option Sales Tax and a 1 percent Special Purpose Local Option Sales Tax.

The sales tax cap, however, does not apply to an Education Local Option Sales Tax approved by the Board of Education, and to a single-county Transportation Local Option Sales Tax. Oconee County has both of these 1 percent taxes.

With the state sales tax of 4 percent, Oconee County’s sales tax now is 8 percent.

If the county and all four of the cities in the county opt in, the county could pass a second Local Option Sales Tax of 0.5 percent or 1 percent, potentially bringing to 9 percent the local sales tax.

The condition is that the revenue from any new Local Option Sales Tax can only be used for property tax reduction.

The Board of Education could opt out of the floating homestead exemption and the county still would be able to implement the new tax as long as all four cities do not opt out.

Response Oconee County Schools

Justin Pauly, Director of Policy and Governmental Relations with the Georgia School Boards Association (GSBA), told me in a telephone conversation on Sept. 16 that GSBA had opposed House Bill 581 during the legislative session “because of the amount of money it is going to remove from the school districts.”

He noted that the opt-out provision has been included in the bill and “Each community will have to assess the change on their own and determine whether or not is right for them and for their community.”

I sent Kim Argo, Chair of the Oconee County Board of Education, an email on Sept. 26 asking if “someone has analyzed the impact for Oconee County Schools of Constitutional Amendment #1 on the ballot.”

“I see that you have included Dr. Branch and Steven Colquitt on this email,” she replied that same day. “One of them should be able to send it to the person that can best respond to your request.”

Neither School Superintendent Jason Branch nor Director of Communications Colquitt responded to the email request.

Response From Oconee County Government

An analysis by the Association County Commissioners Georgia and the Georgia Municipal Association says there are pros and cons for the changes incorporated in House Bill 581.

“The floating homestead exemption rewards homeowners, especially those that reside in the community for a long period of time after this legislation takes effect,” according to that analysis.

“Taxes do not disappear--they only shift,” the analysis continues. “In this instance, the taxes are shifting from homestead properties to all other property types (commercial, agricultural, industrial, residential non-homestead).”

John Daniell, Chair of the Oconee County Board of Commissioners, told me in a telephone conversation on Oct. 10 that because the county has been rolling back the millage rate each year, the new floating homestead exemption isn’t “a big deal.”

“We’re offsetting the inflationary growth anyway,” he said. “We’re going to talk about all of this and make those decisions, but the way we set our tax millage rate, I don’t know if it is going to be a huge, huge impact on us.”

“We might get into the numbers and look and make a different decision,” he said, “but a lot of it has got to do with how well that Constitutional Amendment does in Oconee County.”

“If it passes 90 percent, you’re going to be hard pressed to go against what the citizens just voted for,” he added.

Amendment 2, Referendum

Daniell also said that the referendum raising the amount of tangible personal property tax exemption from $7,500 to $20,000 also would not have much impact on the county.

Our biggest impact probably would be on inventories,” he said, “and I don’t think it is going to be huge.”

Amendment 2 on the ballot creates a Tax Court to handle cases involving complaints with the Georgia Department of Revenue.

The Tax Court would be under the state Judicial Branch and have a chief justice appointed by the Governor.

The Tax Court would replace the Georgia Tax Tribunal, which is a specialized court which was established as an autonomous division within the Office of State Administrative Hearings.