Decatur’s school board is expected to announce this week a nine-person steering committee charged with studying a revision to the district’s homestead exemption, initially passed by voters in Nov. 2016.
Committee members will include someone “representing the interests of the city,” a parent from one of City Schools of Decatur’s Student Leadership Teams, and representatives from the Decatur Lifelong Advisory Board, a the Decatur Affordable Housing Coalition, the Beacon Hill Black Alliance for Human Rights, the Decatur Business Association and three other persons with expertise in finances and tax laws.
Board Chair Lewis Jones said the committee’s tasks include scheduling and convening community meetings for gathering input.
The first steering committee meeting should occur sometime next month. After that a basic timetable includes finishing the report and making recommendations for an exemption revision to the school board by this fall; bringing the new exemption before the 2021 general assembly; if approved by legislators, the new exemption will appear on a referendum, probably in Nov. 2021.
Some background:
Beginning in Jan. 2017, residents 65 and over were given full exemption of all school taxes. This stemmed from long held concerns that seniors, particularly low-income seniors, were selling their single-family homes that were subsequently razed and replaced with much larger homes bursting with school-aged children. Indeed, CSD’s K-12 enrollment more than doubled from 2004 to 2014.
That exemption included a five-year “sunset,” meaning that without any new legislation the exemption would expire Dec. 31, 2021. A primary reason for this buffer was to evaluate whether the exemption would turn Decatur into a haven for wealthy seniors.
The sunset meant that after five years CSD could introduce new legislation that either continues the current exemption, or revises it, or discontinues it.
A study completed last October by Georgia State University’s Andrew Young School Center for State & Local Finance apparently shattered the district’s initial preconceptions.
GSU researchers wrote that the exemption “did not change the buying or selling behavior of those [who] would qualify for the exemption in the city of Decatur.” In other words seniors continued moving out at about the same rate as before the exemption and there wasn’t any increase in wealthier seniors.
Further, although CSD enrollment has leveled off in the last three years, the study showed that the exemption did not “alter the growth.”
Before the exemption took effect, CSD estimated it would lose $1.2 million in revenue annually. But the GSU study showed it was actually a lot more, $3.41 million in 2018 and $3.24 million in 2017. For this reason, the school board has determined that a revision’s critical.
“We definitely don’t want to do away with the exemption,” Jones said. “We want it to continue, but with limits. We feel like the maximum impact of the home exemption [on the CSD budget] should be no greater than $1.2 million.”
The GSU study even offered the committee two possible scenarios:
• “Should CSD desire to maintain the qualifying age at 65, the exemption amount will need to be $100,000 or less with a qualifying income of $40,000 or less …” That is you get an exemption on only the first $100,000 on your property’s value. If your property’s worth more you don’t get more savings.
• Or, “If the qualifying age were to increase to 70, the exemption amount could increase to $125,000 or less with a qualifying income of $75,000 …”
Another possibility, Jones added, is that seniors would be eligible only if their gross income is at or below a certain level.
“The bottom line,” he said, “is that we want our seniors to retire in place and we want to limit the school enrollment. We want a tax saving allocated in a manner to promote age, income and racial diversity.”
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