Agenda Item
b. Resolution to Opt Out of HB581 ~ Statewide Homestead Exemption ~ Updated 2.11.2025
Summary: Presented by: Mr. Byron Schueneman, Chief Financial Officer, Division of Finance
Request: It is requested that the board of education approve a resolution to opt out of the statewide homestead exemption established by house bill 581.
Why: To maintain local control over tax policy, flexibility in revenue management, maintain a downward trajectory of millage rate for all taxpayers, and maintain competitive compensation for employees.
Details: The bill establishes a floating homestead exemption that effectively limits tax increases created by the appraisal or valuation process. As real estate values have risen dramatically in the past decade, there has been corresponding growth in the tax appraised value and tax assessment if taxing authorities don’t act to proportionately roll back the millage rate.
In response, HB581 was born. This bill creates a floating (aka fluctuating) homestead exemption that limits annual tax increases to homeowners to no more than the rate of inflation as measured by CPI.
Financial impact: If HB581 was enacted in 2017 and the floating homestead exemption was established the same year, the amount of exempted taxes in the following calendar year would have been $31.7M.
This calculation is from the actual digest value of homesteaded properties only. For DeKalb, roughly 46% of the digest value is attributable to homesteaded properties.
As we roll these calculations forward using actual annual inflation as measured by CPI, year over year, and the actual homesteaded digest reassessment growth (provided by the tax commissioner) the compounding effect that the floating homestead exemption would have had on our overall property tax collections is significant.
As the floating homestead grows so does the amount of exempted taxes. If we roll this forward all the way to the district’s current fiscal year, FY2025, the amount of exempted taxes would have been $197.7M. To put that into perspective, that is 20% of our overall anticipated tax revenue for this fiscal year. At an average teacher cost of $104,313.12, that is 1,895 teaching positions or nearly a quarter of our teacher workforce.
Contact: Mr. Byron Schueneman, Chief Financial Officer, Division of Finance, 678-676-0270
Effective: March 1, 2025
Status: Attorney Approval Not Required