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Decatur School Board, City Commission discuss senior tax break, housing developments

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Decatur School Board, City Commission discuss senior tax break, housing developments

The Decatur School Board and Decatur City Commission held a joint work session on Oct. 24. Photo by Sara Amis
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By Sara Amis, contributor 

The Decatur School Board and the Decatur City Commission held a joint work session Oct. 24, to discuss planning and development.

“We are getting ready to start our next big strategic plan,” said Mayor Patti Garrett. “We will be looking at 2020 to 2030 and we will launch that planning process with setting priorities and goals for the next decade. We will have a lot of community input, and we look forward to including City Schools of Decatur as a stakeholder.”

The meeting began with a discussion of the property tax study released by CSD on Oct. 1, which was discussed by the board in a meeting immediately before the joint work session. The study measured the impact of an expanded tax break for seniors. The tax break exempts any homeowner in Decatur over the age of 65 from paying school taxes.

Board Chair Lewis Jones summarized that discussion for the commission.

“The objective of the report was to find out how much the senior tax exemption was costing us,” he said. “When we passed the exemption we knew that we did not have all of the data at hand to know exactly how much it was going to cost, and so we went into it knowing that at the five year mark we would have to recalibrate. Not only to see what limits might be appropriate, but also to see whether the exemption at the full 100 percent was achieving its goals.”

Jones said the original goal the exemption was twofold: Limiting enrollment growth in the schools by enticing seniors to stay in place and not sell their homes and to keep more seniors in the community.

“The report in brief concludes that if the objective was to slow enrollment growth, there’s no evidence that it actually worked,” Jones said. “It also concludes that if the objective was to affect senior’s behavior, whether they stay or go, there’s no evidence that we had any impact there either.”

Jones added that that did not mean that the exemption was going away, and that Georgia State had provided a software tool called Tableau that would allow the CSD Board to determine the effects of restrictions such as income limits or caps on the exemption.

“We still have some questions about how the model works, but the next step will be running different scenarios with different limits to determine what is appropriate,” he said. “We are still very much at the beginning of that process.”

The report recommended the school system’s leadership consider changes to the tax break if it is renewed if CSD wants to limit its impact on the school district’s finances. The report also had an important caveat.

“Should CSD desire to maintain the qualifying age at 65, the exemption amount will need to be $100,000 or less with a qualifying income of $40,000 or less based on federal AGI to meet the desired goal of a cost of $1.2 million or less to the CSD,” the report says. “If the qualifying age were to increase to 70, the exemption amount could increase to $125,000 or less with a qualifying income of $75,000 or less based on federal AGI. While we found no effect of the full exemption on the behavior of eligible buyers and sellers at all income levels, it is possible that offering a limited exemption available to lower income residents might impact decisions to buy or sell a home in Decatur. Due to data constraints, we were unable to examine this scenario. Thus, it is an open question as to whether income limited age-based property tax exemption policy is likely to alter the path of CSD growth in student enrollments. Should the policy be enacted its impact could be studied after several years.”

School Board member Heather Tell said that the costs of the tax break are being passed on to other residents of Decatur.

“It’s not just that we haven’t collected this money from seniors,” Tell said. “We have passed this cost on to all of our other taxpayers. We need to keep our promise not to exceed that $1.2 million figure that we originally proposed. We have to be fair to all of our taxpayers.”

She added that the Board had asked for guidance on what variables to consider, and Georgia State recommended income limits and exemption caps.

GSU recommended against weighing time seniors have lived in the market because it was arbitrary and might discourage seniors from moving to Decatur.

Superintendent David Dude said, “We’re at the very start of the process. I think there has been some concern that we are at the end of the process and are about to vote on it, but that’s not true at all.”

The current exemptions will sunset in 2021, and the types of constraints that can be put on a homestead exemption are restricted by the Georgia constitution.

Jones said, “We will need a proposal by September of next year for the following year’s legislative session.”

Decatur Mayor Pro Tem Tony Powers said, “The city is going to look at our homestead exemptions to see if any need tweaks. That’s coming up in 2020 as well.”

Mayor Garrett added, “It may be better to bring those [exemption changes] together rather than separately.”

Dr. Dude raised the ongoing question of how to predict and prepare for future enrollment, and the importance of cooperation between CSD and the city of Decatur government.

“Our staff have worked very closely together, the city has very graciously allowed my staff to attend [housing] development meetings so we know what’s going on,” Dude said. “Every work agenda we’ve been adding what we call the development report, and that is the outcome of those meetings. We’ve expanded what we’re looking at in terms of developments, both existing and new, and we’re getting much better at estimating the impact of those developments on schools.”

Powers said that the city was conscious of the impact of development on the school system’s budget.

“None of these new projects were enticed here by offering any abatements or incentives so you got the full share of what the project brings in,” he said. “Just know that we look very closely at that about these projects, that if it’s going to have an impact it needs to be a good impact on our school system.”

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