City Schools of Decatur on Oct. 1 released a report detailing the conclusions of a property tax study that examined the effect an expanded tax break for seniors had on the school system’s budget and enrollment.

The report, produced by Georgia State University, found that the tax break cost the school system millions and did little to offset the growth in the school system.

According to the report’s conclusions, the tax break “did not change the buying or selling behavior of those that would qualify for the exemption in the city of Decatur. Nor did it alter the growth in enrollments in CSD that has been ongoing since 2010. Rather, the policy incentivized the older residents that had not previously filed for an age-based property tax exemption to file for one. This shift from other homestead exemptions to the 65 and over full homestead exemption can account for much of the unexpected loss in revenues due to the 65 and over policy change.”

To read the full report, click here.

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Decatur Schools expanded tax breaks for seniors 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 2017, was partially a way to alleviate concerns about the school tax burden on seniors. It exempts any homeowner in Decatur over the age of 65 from paying school taxes.

The idea of expanding tax breaks for seniors was publicly discussed at a School Board meeting 2015. Board Member Lewis Jones said at that meeting he would propose a resolution in support of lowering the age of the homestead tax exemption for seniors to 65 following public comments about how approving the bond would affect the seniors living in the city. School Board members reasoned that the revenue lost from the expanded homestead tax exemption could be offset by the lower enrollments. More seniors staying means less families with children moving into the city.

Right?

Apparently not, according to the report. And the school system’s financial estimates of what the tax would cost the school system were off as well. The initial estimate of the costs to the school system was $1.2 million per year.

The homestead tax is set to expire in 2021 unless it is renewed. The report estimated how much revenue the school system would recover if the homestead exemption is allowed to expire.

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According to the report:

Applying the 2018 millage rate of 18.66 to the estimated digest value that would be recovered should the full homestead exemption sunset, yields a cost to CSD of $3.41 million per year or a 1.97 change in the annual millage rate. Applying the appropriate millage rate to the 2017 value of the recovered digest yields a cost to CSD of $3.24 million per year or a 1.92 change in the annual millage rate.

Decaturish is still reviewing the report and its conclusions. So is the School Board. The board intended to discuss the report at its Oct. 1 meeting but delayed that so board members would have time to study the report before making comments.

Superintendent David Dude said during the meeting, “I haven’t had much time to look at it. I know most of you haven’t had time to look at it, so I would recommend that we discuss it at the next meeting so that you have time to dig into it because it is a pretty dense report. There’s a lot of information there to absorb. That would be my recommendation unless you want to have a discussion about what you’ve been able to see so far.”

Writer Logan C. Ritchie contributed to this report. 

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