A recently released study from Georgia State University shows that a homestead exemption for seniors 65 and over hasn’t altered City Schools of Decatur’s enrollment growth. Further, the study documents that the district lost far more money than originally anticipated after the exemption took effect.
Voters passed the exemption in Nov. 2016, with the study, prepared by GSU’s Andrew Young School Center for State & Local Finance, covering the years 2017 and 2018.
Beginning in 2017, seniors 65 and over were given full exemption of all school taxes. There had long been concerns that seniors, particularly low-income seniors, were selling their smaller single-family homes that subsequently got replaced by McMansions bursting with school-age children.
According to figures provided by Decatur Building Official Mark Ethun, from 2001 to 2016, 1,202 new-house permits were issued for single-family dwellings and town homes. This means, at least as of three years ago, roughly 13 percent of the city’s residences were “redeveloped.”
It was therefore hoped the exemption would keep seniors in their homes while also muting CSD’s explosive enrollment. Indeed from 2007 to 2017 enrollment escalated from 2,473 to 5,328, or 53 percent.
Additionally a five-year “sunset” was added, meaning that without any new legislation the exemption would expire after 2021. Part of the reason for this buffer was to evaluate whether the exemption would turn Decatur into a haven for wealthy seniors.
Essentially, after five years CSD could introduce new legislation that either continues the current exemption, or revises it, or discontinues it.
In its conclusion the 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.
The study also concluded that the exemption did not “alter the growth” in CSD enrollments.
Nevertheless CSD’s K-12 enrollment has leveled off in recent years, especially this year. Preliminary figures published in August show a total enrollment of 5,723, an increase of 176 students over August 2018. That’s the smallest increase from one year to the next in at least 13 years.
Since 2013 the enrollment has increased by only 30 percent, another hint that it’s leveling.
“This study is showing that this [leveling off] is not influenced by the exemption,” Superintendent David Dude said in a recent interview. “Which means we’re probably reaching the community’s carrying capacity. Our latest projections show that [CSD’s enrollment will peak at] around 6,000. From here on the only way you can add significant residential units in the city is [through] apartment complexes, because there aren’t any large spaces anymore.”
Before it took effect CSD estimated the exemption would cost the district $1.2 million in revenue annually. The GSU study showed it was actually a lot more, primarily because the exemption “incentivized the older residents [who] had not previously filed for an age-based property tax exemption to file for one.”
Subsequently CSD’s lost revenue was $3.41 million in 2018 and $3.24 million in 2017.
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