Decatur Residents Vote To Expand Property Tax Exemptions


From the Decatur Tax Blog

Unofficial results from yesterday’s election show that all four proposals to expand property tax homestead exemptions in Decatur passed, including a ballot question that will exempt homeowners over the age of 65 from school taxes beginning in 2017.  Voters also approved a fifth measure which eliminates an exemption that was no longer in effect.

The vote on Senate Bill 339, which increases the basic homestead exemption to exempt $25,000 in assessed value, was the most decisive result with 86 percent approval.

SB 340, which increases the amount of assessed value exempted for homeowners over the age of 65, passed by 83 percent.

Voters favored the creation of a new exemption under SB 342 for homeowners over 62 with income under $50,000.

SB 343, the senior school tax exemption, proved to be the most controversial of the measures, but still passed handily at 75 percent.

Homeowners in Decatur who currently have the existing age 65 homestead exemption, the “GH2,” will be granted the new school exemption automatically in 2017.  Homeowners with the basic homestead exemption do not have to reapply to receive the increased exemption amount; that will also be granted automatically.  The City of Decatur will provide further guidance to homeowners on how and when to apply for the new exemption under SB 342 after the election results have been certified.

Photo courtesy of City of Decatur website

16 thoughts on “Decatur Residents Vote To Expand Property Tax Exemptions”

  1. Does anyone know if the state Constitution mandates property tax as the sole means for a local School Board to raise revenue? If not, maybe Decatur needs to look at another source of revenue. As long as we are a “school haven” with a poor commercial/residential tax base ratio, paying for our schools is going to be a problem.

    1. There is another source of revenue. It’s called E-SPLOST and many districts, Decatur included, have and are using it.

      1. SPLOST is only for capital improvements. Is there any option (other than property taxes) to pay for operational expenses.

        1. True, but if you didn’t have E-SPLOST for capital projects, that money would have to be taken from property tax revenue.

          1. Not really. When schools get a dedicated source of revenue for capital projects, they mostly waste the money on projects that weren’t really needed in the first place.

              1. Or football stadiums. Or gyms. Or artificial turf. Or stadium lighting. Not all of these apply to CSD, but ESPLOST is county-wide, and county schools have spent millions on all of those things.

  2. The siren’s song of low taxes will drive this ship on the rocks. Thought we would have learned by now.
    You get the kind of world you’re willing to pay for.

  3. I’m glad the senior exemption passed. High time our school system started living within its means, and it could start by trimming some fat from the surfeit of top management positions.

    1. CSD has not made any promises to trim their budget in connection with the 65+ exemption. The board believes that the exemption revenue loss will be made up by appreciating property values and the related larger tax collection from everyone one 65 and below (or those not married to someone 65+).

      Btw, was it ever explained how the exemption will work for joint property owners not the same age?

      1. I think they should average the two ages. So leaving your long-time spouse for a much younger new partner will come with a tax penalty!

  4. The SB 343 exemption is horrible policy:

    1. The exemption assumes that those over 65 do not have kids in school, and therefore should not have to contribute to this municipal service. Municipal services are not usually paid for on a “fee for service” model. There are no toll roads in town that generate money to maintain a specific street. The logic behind a fee for service model implies that CSD should fund its operations through charging tuition and create a private school system. Cannot afford tuition? Leave Decatur. People would be in the streets rioting if this happened.
    2. Why limit the fee for service exemption to those over 65 who presumably do not use CSD resources? How about property owners who have no kids (by choice or otherwise) or whose kids are not yet in a CSD school? Why don’t families with kids at St. Thomas More, the Friends School or Paideia get an exemption because they are not using the school system. Because they chose to buy property in Decatur.
    3. I have never had to call the police to my house in 17 years (thank God). Can I pay for police protection only when I use it? Of course not. What about parks, or recreation centers? How about city sponsored programs for older folks living in the city? Do you have to pay for these things, even if you do not use them? Or, if by definition, you are excluded from participating in them. Of course you do. These things, like schools, build a community.
    4. The exemption is a huge disincentive for civil participation. If you pay no school tax, you have no financial incentive to chime in about how the schools are run. What would one care about how the schools are run when one does not have to pay for it (unless, of course, one values successful schools because it fosters a strong community, see below).
    5. Why not limit the franchise for school related issues to those who pay taxes? Those property owners over 65 have no “skin in the game” when it comes to running and paying for the schools. Disenfranchising older property owners from school board elections makes lots of folks uncomfortable or angry. Then explain why someone who has no interest in supporting the school system financially has an interest in how that money is spent? Because they live here and the health of the school system is integral to the health of the city? I’d agree on this point, and it demonstrates why the fee for service model for a school system is wrong. Simply put, if you are in for a dime you are in for a dollar. If you want the benefits of a strong community, you have to pay for it.
    6. The exemption infringes on the rights of non-exempt property owners. Allowing the exempt property owners to choose politicians who set school budgets and rates for school taxes dilutes the voting power of those who do pay school taxes. Why is this fair? How is it constitutional to dilute the voting rights of city residents based on their age? (BTW, if you rent, you are paying CSD taxes, though indirectly. See numbers 7 and 8).
    7. Why do folks over 65 get an exemption when commercial property owners (and commercial renters) do not? A business that owns property in the city limits has no kids in CSD schools. It does not use the educational system. And the business owner who rents commercial space essentially pay the tax through rent. A commercial property owner sets rents in part to cover costs like loan service, maintenance and property taxes. The school taxes are passed along to every hometown shop and restaurant.
    8. Who really gets hosed by the exemption? Those over 65 who rent. Agnes, a retired school teacher on a fixed income, rents an apartment above the DQ. Agnes effectively pays property taxes as part of her rent — remember that landlords in part set rents to cover expenses like property taxes. When her lease expires, her rent will go up if city school property taxes have increased. Agnes, however, receives no equity appreciation because she is a renter. Her friend, Scott, who owns a condo on Ponce and is also on a fixed income, pays no property taxes but realizes equity appreciation. Explain how that is fair.
    9. The exemption creates an incentive that could gut the tax base. If you are over 65, an empty nester and looking to downsize, come to Decatur and pay no property taxes. Never mind that this will choke off tax revenue to pay obligations accrued in the past when the tax base was broader.
    10. As alluded to repeatedly above, those over 65 receive a huge benefit from the success of the school system. It has been major factor in the success of the town over the last 20 years. Schools foster community spirit and community involvement. CSD is why so many folks have moved here and invested in the success of the city. Property values for those over 65 went up in large part because of CSD. I bet not a single citizen of Decatur is willing to surrender the increase in the equity of their home that is attributable to the availability of quality public education in Decatur.
    11. Finally, I am not a Grinch who wants to drive out older folks on fixed incomes. Why is the exemption for school taxes not subject to a means test like the general homestead exemption? Because the SB 343 exemptions based upon a flawed model (fee for service) and a flawed assumption (a school system only benefits those with kids in the system).

    1. “9. The exemption creates an incentive that could gut the tax base. If you are over 65, an empty nester and looking to downsize, come to Decatur and pay no property taxes. Never mind that this will choke off tax revenue to pay obligations accrued in the past when the tax base was broader”

      I’ll offer a counterpoint on this one.

      I’m sure the situation you describe can and will happen, but I have a hard time seeing it becoming commonplace, simply because in the absence of a large residential annexation, the housing stock does not seem to really allow for it. They could look for something smaller and older, and hope a builder with a no contingency all cash offer doesn’t scoop it up first. They could look for something that’s been upgraded and expanded, and try to outbid the three families of 5 who are all desperate to get into the schools. They could look at the numerous new builds around town, but three stories and 3k square feet isn’t exactly “downsizing”. The “cottage court” project is being reserved for CoD employees and educators, so that’s out unless the concept proves financially viable. Townhomes would present some opportunity, I suppose. I absolutely believe there are plenty of people who might WANT to downsize into Decatur, but I’m not sure there is really much opportunity for them to do so.

    2. One thing that I haven’t seen mentioned in all the discussion about this exemption for over 65-ers, is that when the school bond referendum came up for vote this summer, the response by the school system to seniors’ concern about paying even more for schools was to say they’d try to push through this exemption. So I voted for the bond, hoping that you parents would vote for my exemption. I care a lot about good schools, even though CSD spends lots more than they did for my kids 25 years ago. So thanks to those who supported our needs after we supported yours.

  5. It’s unfortunate, but the passage of the senior tax school tax exemption will mean Decatur will become even less affordable for working families who own homes and for renters of all ages.

    I am not happy that the School Board was disingenuous about it’s impact on taxes – they were focused on the millage rate, not tax paid. As a whole, the rising value of property values should lower the millage rate, keeping taxes paid roughly the same. Now, the amount of taxes paid for under 65 houses and commercial property will go up.

    That revenue that otherwise came from 65+ owned residences will come straight from property taxes elsewhere – think of squeezing the balloon. It’s not free money.

    While I don’t disagree with Ms Wilson’s push noting there are seniors who are on fixed income and struggle, there are also many families out there struggling with two jobs, trying to afford mortgage + daycare + high property tax. This makes it worse for people under 65.

    There are very many affluent seniors out there, and this now shifts tax away from them. It was a HUGE mistake to not make this tax cut means-tested, or limited to something like $250k in appraised value, really to target seniors who might struggle with bills (people who would be cash poor but have a lot of equity in the house)

    I also agree with the post that when seniors don’t contribute to the tax base for schools, the public schools decay. Look at Florida.

    We really need accountability on this issue. We need to know how much this costs, and spell out to each homeowner the amount of extra property tax they are paying as a result of this.

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