So far, no local governing boards in Bulloch County have opted out of the special new “floating” homestead property tax exemption set in motion by 2024’s Georgia House Bill 581. So the county also remains eligible to create a new “Flexible” Local Option Sales Tax.

Unless local governments opt out by March 1, one of the law’s provisions – enabled by a state constitutional amendment approved last fall by 62.9% of voters statewide, including 61.7% of Bulloch County voters – will create the offsetting exemption, rolling back increases in the taxable value of owner-occupied homes to the national inflation rate when local real estate markets soar higher.

So far, neither the Bulloch County commissioners, the four city and town councils in the county nor the school board has taken action toward opting out. If they intended to opt out, the law requires that any board proposing to do so hold three public hearings by the March 1 deadline.

Robert Fisher, deputy chief appraiser for the Bulloch County Board of Tax Assessors, noted as much when he spoke to Statesboro’s mayor and council during a  Jan. 28 work session. He had also spoken to the Bulloch County Board of Commissioners, providing information on House Bill 581 and related matters, earlier in January.

“This is probably the biggest piece of property tax legislation the state has seen in probably 20 years,” Fisher observed.

Multifaceted tax law

In fact, the law has six new provisions, but the most salient for Statesboro were the floating homestead exemption and potential Flexible Local Option Sales Tax, or FLOST, he said. Before Fisher finished his City Council presentation, he also noted provisions that eliminate the requirement that tax assessment notices carry estimates of the resulting tax – which lawmakers said were misleading because they were based on the previous year’s millage rates – and replace it with a statement of the current year’s estimated “rollback” rate.

But of more immediate interest to people who own their own homes, the floating homestead exemption will offset the difference between the appraised value of  an  owner-occupied home, as  determined from local real  estate sales during the previous year, and the national inflation rate.

For example, the federal cost-of-living increases based in the Consumer Price Index, or CPI, were only 4.1% from 2022 to 2023 and 3.2% from 2023 to 2024, while Bulloch County’s residential real estate price inflation topped 13% each of those years. (These numbers weren’t part of Fisher’s presentation but are reused from an August 2024 Herald story.)

The new Georgia law actually lets the state Department of Revenue commissioner determine what national inflation standard to use, but the current commissioner has chosen the CPI, as Fisher noted.
“Homeowners this year will essentially receive no increases. 2024’s value will be their assessed value for 2025, and then going forward it will be adjusted by the rate of inflation,” he said.

Apply for exemptions

Homeowners who have already applied for and receive a homestead exemption would get the new exemption automatically. Bulloch County currently has no locally created exemptions but only the state-established $2,000 assessed value exemption for owner-occupied homes and $10,000 exemption for homeowners who are senior citizens.

But a significant number of eligible homeowners have not signed up for the current exemptions. So they will need to sign up at the Board of Assessors office by April 1 to receive this year’s new exemption, Fisher said.

No opt out & FLOST

Local governing boards can opt out, this year and permanently, to keep the higher revenue gains that may be provided by real estate inflation to fund government services. But if they don’t intend to do that, the local boards have already done everything they need to do – which is nothing – in order for the floating exemption to take effect.

“If you do nothing, you are going to participate in this exemption,” Fisher told Statesboro’s mayor and council. “So by March 1st, if you take no action, Statesboro will be providing this option to its residents.”

If neither the county commissioners nor the elected councils of Statesboro, Brooklet, Portal or Register opt out of the special “floating” homestead exemption, then the county would be eligible to enact, by referendum, the new Flexible Local Option Sales Tax.

If any of the municipalities opted out, the county would be barred from enacting the tax, he said. The Bulloch County Board of Education could opt out without affecting the county’s ability to enact a FLOST, since the school system receives other sales taxes and would not benefit from FLOST.

Creating a Flexible Local Option Sales Tax, or FLOST, also allowed under House Bill 581, would require an agreement between the county and its largest municipality, namely the city of Statesboro, and approval by a majority of Bulloch County voters, with Nov. 4 being the earliest likely referendum date.

The tax could be a fraction of 1% up to 1% maximum. But under the law, the revenue must be used to roll back the property tax millage.

Not added revenue

So the FLOST wouldn’t directly provide revenue for new personnel or projects, apart from a property tax rate increase.

Statesboro Mayor Jonathan McCollar  noted that Bulloch is one of about eight Georgia counties where the original 1% Local  Option Sales Tax goes  exclusively to school system  operations. In most other Georgia counties, the county government and cities receive shares of the original L.O.S.T.  revenue based on population. He asked what had become of an effort to provide these few counties and their cities with an added sales tax option.

That effort was merged into House Bill 581, with the FLOST being the only new tax it authorizes, Fisher explained.

Fair or regressive?

Local advocates of various sales taxes have often called them “the fairest tax” because everyone pays them, including renters as well as property owners. But rising sales taxes can hit people with lower incomes harder, since purchases of necessary items make up a larger portion of their incomes.

“Most folks would tell you a sales tax is really pretty regressive,” Statesboro City Manager Charles Penny said during last week’s work session. “It sounds good on the front end because we’re able to roll back millage rates, but when you  think  about who’s paying sales tax, low-income senior citizens and people  on fixed incomes are paying a higher percentage when they go  to the  grocery stores or buy anything.”

He said it amounts to shifting tax from property owners to other residents. Unlike the new homestead exemption, the rollback provided by the sales tax would be applied to all classifications of taxable  property, including rental housing, businesses and industries.

“But in this case we’re really sort of caught,” Penny told the council members, “and that’s why I’m not recommending to you that we opt out. Now, council can do whatever you like.”

He noted that Chatham County was in the process of opting out, and other counties have done  so. But Fisher reported that some lawmakers who supported HB 581 have  now introduced legislation that could  reverse the opt-out provision.

Some of the new and some of the veteran Bulloch County commissioners have previously voiced support for an added sales tax to provide a property tax rollback. Commissioners Chairman David Bennett said none of the commissioners have expressed any “feeling that there’s a need to opt out” to him.

“Personally, I look at it like the state has voted overwhelmingly, I believe it was 63% in favor of House Bill 581, and we should follow the will of the people,” he said. “So that’s what we’re going to do.”