Press Release: City of Dacula HB 581 Opt Out
(Posted January 1, 2025)
The City Council of Dacula intends to opt out of the statewide adjusted base year ad valorem homestead exemption for the City of Dacula, Georgia. All concerned citizens are invited to the public hearing on this matter to be held at City Hall, 442 Harbins Road, Dacula, Georgia 30019 on January 16, 2025 at 6:00 p.m. Times and places of additional public hearings on this matter are at City Hall, 442 Harbins Road, Dacula, Georgia 30019 on January 23, 2025 at 6:00 p.m. and on February 6, 2025 at 6:30 p.m. Public comment is invited and encouraged.
The Statewide Floating Homestead Exemption outlined in HB 581 and codified in O.C.G.A. Sec. 48-5-44.2 is considered an adjusted base-year homestead exemption, because it allows the homestead’s base-year value to increase annually up to the inflation rate determined by the State Revenue Commissioner. The value of the exemption is the difference between the adjusted base-year value and the fair market value. Even if two properties begin with identical base year values, if the fair market value of the properties diverge over time, then the property with the higher fair market value will receive the larger exemption while potentially paying the same in property taxes.
The Legislation permits local governments to remove themselves from the exemption before March 1, 2025. Every local government is affected by the exemption differently based on its tax digest mixture (commercial, industrial, office, residential, vacant, etc.) and the average longevity of homestead properties. The City of Dacula anticipates being particularly impacted because of the high percentage of stable residential properties in its tax digest.
The City conducted a “look back analysis” to compare revenues if HB 581 had been in effect over the past ten years. The results show an estimated loss of revenue of $1.7 million over that period and with an estimated annual loss of $378,000 at year ten. This amount represents 6.83% of the City’s current annual budget.
The City cannot absorb the reduced revenue and continue to maintain high quality services at their current levels. A millage rate increase or a reduction in services could be required to cover operational expenses to balance the budget. Opting out provides the City needed flexibility to meet demands, provide services, and balance its budget with stability. This summary is provided to satisfy the requirements of HB 581 (O.C.G.A. Sec. 48-5-44.2(i)).
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