Clarkesville officials summed up citywide implications for HB 581 in a matter of minutes during a public hearing over the bill Monday, Feb. 3.
HB 581 is a statewide floating homestead exemption that caps the annual increases in property values as a form of tax relief.
Approved by referendum by a majority of Habersham County voters last November, the bill would cap homestead exempt property valuations to the inflationary rate determined by the Georgia Department of Revenue. The bill also requires the reassessments of properties every three years.
Clarkesville City Manager Keith Dickerson explained the bill at length throughout the hearing, summing up its potential impact on taxpayers and cities alike.
Dickerson said the bill, which requires agreement between all seven of Habersham’s cities and the county itself, is intended to control (or cap) taxes of property owners. Values have skyrocketed in conjunction with rising home values for the last five years.
Instead, Dickerson explained, under the bill, homestead-exempt properties will only rise to match the Consumer Price Index – which he said “runs between 1.5%-3% yearly.”
The exemption, as Dickerson noted, would not apply to commercial or industrial property.
“This does not affect the millage rate,” Dickerson said. “This has no say over how much we’re going to set the millage rate to charge you for taxes.”
If HB 581 moves forward, a Floating Local Option Sales Tax could come next, if approved by voters by referendum.
“We don’t get Local Option Sales Tax in this county because of the school system,” Dickerson said. “So, for us to be able to get that one penny tax would potentially lower taxes by 30%.”
Local impact of FLOST
With more than 220 businesses and over $200 million being spent in Clarkesville annually, Dickerson added that an additional one penny tax paid mostly by visitors who live outside Habersham County could go a long way for city revenue – as well as relieving the tax burden from homeowners.
“Most of our money is being spent by people passing through…right now, we pay for events and festivals basically to entertain people (who live) in (Clarkesville). There’s no return on that. There’s no economic impact of that,” reiterating his belief that FLOST could bring greater revenue streams and potentially lower taxes.
Under FLOST, according to Dickerson, Clarkesville has the potential to bring the millage (tax) rate down from 5.428 to 3.674.
A mill is equal to $1 per $1,000 in taxable property value. In Clarkesville, property is currently taxed at 100% of its value – though council is considering bringing that assessment value to 40% to align with surrounding cities.
No resident spoke for or against HB 581 during the hearing.
“Our information is that everybody (the cities) understand, and everybody plans to opt-in,” Clarkesville Mayor Barrie Aycock said.
So far, the only government entity in the county to opt-out of the bill is the Habersham School System – though this doesn’t prevent the measure from moving forward.
