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Decatur Schools Property Tax Study Committee charged with analyzing cost of senior tax break

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Decatur Schools Property Tax Study Committee charged with analyzing cost of senior tax break

FILE PHOTO USED FOR ILLUSTRATION PURPOSES: The Active Adult classes at the Decatur Recreation Center. Photo from Be Active Decatur

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The Active Adult classes at the Decatur Recreation Center. Photo from Be Active Decatur

This story has been updated. 

The idea of exempting any homeowner in Decatur over the age of 65 from paying school taxes was well-intended.

The initial estimate of the costs to the school system was $1.2 million per year. That was way off, however. The current estimate of what this tax break is costing City Schools of Decatur is $2.4 million per year. Combined with other exemptions, CSD lost $4 million in revenue in Fiscal Year 2017-2018. The projected loss for the current Fiscal Year, 2018-2019, is $4.8 million, CSD Finance Director Susan Hurst said.

How much higher can it go? A committee being formed by the School Board will be tasked with finding the answers.

A Property Tax Study Committee led by school board members Heather Tell and Garrett Goebel is studying the effect the tax break is having on the school system. The committee doesn’t have any members yet, Goebel said.

“Summer break made convening a committee impractical. No committee has been convened to date,” Goebell said. “Mrs. Tell and I have recommended that the board first bring in outside expertise to review the data and provide options and recommendations. A public participation process with [the] committee may follow.”


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The decision to expand the tax break for Decatur’s seniors came after the School Board asked voters to approve a $75 million general obligation bond for school construction, which voters did in 2015 by an overwhelming margin. Borrowing money means higher taxes to pay off the debt. The tax break, which was also approved by voters and took effect in January 2017, was partially a way to alleviate concerns about the school tax burden on seniors.

Before the tax break appeared on the ballot, the School Board asked the state Legislature to add a “sunset” provision that would end the tax break in 2021 unless it was renewed. The board caught some flack for that decision, but it did give the board some time to examine how the lost revenue would affect the school system.

CSD leaders hoped fewer seniors leaving Decatur will mean less families moving into those houses and an overall cost savings for CSD. Seniors taking advantage of the tax break will be cheaper for the school system than the cost of educating the children in families that move into Decatur when those seniors move out, the thinking went.

Hurst said educating students now costs CSD more than $13,000 per child.

Whether the tax break has resulted in lower enrollment is something the committee is studying, Superintendent David Dude said.

“I don’t think we have an answer to that yet,” Dude said.

He said the initial estimate was low for two reasons: home values grew faster than district officials expected and more homeowners – 142 more to be exact – are taking the the exemption than officials expected.

Having less revenue than anticipated hasn’t affected school system operations yet, Hurst said. There was a total 4.5 percent growth in the tax digest over the last fiscal year. Hurst said that translates into a 6.41 percent increase in revenue for the school system from last year to this year.

“Even though we see a loss in revenue, we’ve done OK because of the digest growth,” she said.

There are currently 1,169 homes claiming the new senior tax exemption, according to information provided by CSD.

“This one exemption dwarfs every exemption we have,” Dude said.

Goebel provided this draft of some of the questions the school board’s Property Tax Committee is examining:

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