Two people asked questions, but no one opposed the Gilmer County School System opting out of HB 581 at the first required public hearing.
Before public comment, Gilmer County Schools Superintendent Dr. Brian Ridley gave a 20-minute presentation.
“Opting into HB 581 is an expensive proposition of us,” Ridley said. “We’ve already voted to exempt 65 and over, that’s what we decided to do. We can’t afford both.”
He stressed the 65 and over school tax exemption would not be affected by the school system opting out of HB 581.
In a brief explanation, he said HB 581 was a state imposed floating homestead exemption. It would lock home values at the 2024 value and only allow increases based on the inflation index.
A one-cent sales tax can be passed by counties who opt into the bill, but this sales tax is not available to school systems.
“We do not have that option,” he said. “It would just be a loss for us.”
Local governments have one chance to opt out of the bill. They must have three public hearings and formally vote to opt out by March 1.
“This is a one-time local decision, either you opt in or you opt out,” Ridley said. “There is no option later to get in. No option later to get out.”
For the last eight years, the Gilmer County Board of Education has used the rollback rate or a lower rate, he said.
In the last two budgets, the board has used $6 million, $3 million each year, out of the general fund, which helped keep the millage rate lower.
Allowing HB 581 to be applied to the Gilmer County School System would mean a net loss of $3.7 million in local revenue.
It would also affect state and local funding. A quirk of school funding is that state and federal funding is calculated using the property digest. The fact an exemption is given to homeowners does not affect the calculation.
What this means is the school system receives less funding from the state and federal systems.
He estimated the school system currently misses out on $900 in revenue, per exempted home, with the 65 and over exemption between tax revenue and state and federal calculations for funding.
The state also has a claw back rate it imposes on school systems. Ridley said the state withholds 5 mils from school funding, which is supposed to be made up by local funding. This results in a 5 mil minimum for school systems.
Ridley gave a series of pros for the school system opting out of HB 581. His reasons ranged from maintaining local control of tax policy to the flexibility of revenue management.
“In my opinion, Gilmer County has a pretty good deal with the board of education they have,” he said.
In addition, he said opting in would not necessarily result in lower taxes. School budgets are calculated by what they need to run the system and then the tax rate is set.
“If we don’t need it, we don’t levy it,” Ridley said.
Gilmer County Board of Education will hold its next public hearing on opting out of HB 581 on Jan. 23.