Decatur Schools committee considers constraints on tax breaks for seniors
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By Sara Amis, contributor
Decatur, GA – The City Schools of Decatur Senior Homestead Exemption Committee held its second meeting via Zoom on May 20.
The committee was formed by the Board of Education in order to explore ways to reconfigure CSD’s senior tax break. The current exemption, which was approved in 2016 and will sunset in 2021, cost the system an estimated $4.3 million per year, while not achieving the original goal of reducing enrollment. The School Board formed the committee after making the decision to retain some form of the exemption while limiting the costs to $1.2 million per year.
After naming Paula Collins as chair, the committee began to wrestle with possible constraints on future versions of the exemption, which by state law are restricted to age, income, and net worth.
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Committee member Bill Floyd, Decatur’s former mayor, cautioned that while adding the exemption might not have changed behavior in terms of people selling their homes, taking it away might. Speaking about people who qualified for the existing homestead exemption but might not qualify for the new one, Floyd said, “You have to look at how it’s going to impact their lives and their thoughts.”
Committee member Maria Pinkelton raised the question of whether or not home value as a part of net worth should even be a consideration.
“Are we asking them to put every dollar they have towards tax? And who do we lose?” asked Pinkelton.
Superintendent David Dude said there are reasons to consider home value as par of any changes to the tax break.
“I’m not saying this to advocate for or against anything, but there are people who are concerned that if we ignore home value completely, we may have people in million-dollar homes who get these exemptions who then cash out five years later having not paid any taxes,” Dude said.
Committee members seemed generally opposed to the idea of including the home value in a calculation of net worth.
“Their home may be worth a million dollars, but if they’ve lived here for thirty years, they didn’t pay a million dollars for it,” said Meg Robinson, adding that the effect would be counter to the Board of Education’s stated desire to encourage residents to age in place.
Committee member Hans Utz agreed.
“When we talk about people being priced out of Decatur, we should recognize that home values have grown and the tax burden may have grown out of proportion to someone’s retirement income,” Utz said.
Committee member Gwin Hall said, “The rallying cry has always been that we want to prevent people being taxed out of their homes. It’s good to clear the air on this, but [including home value] is not something that most of us would seriously consider.”
Utz was even more emphatic.
“You cannot eat with the value of your home unless you sell it,” he said. “I’m not going to put forward or vote for anything that would put people in the position of having to sell their home to pay taxes on it. That’s unconscionable in my opinion.”
If home values are not going to be considered, that leaves age and income as measures for the committee to ponder.
The Tableau data analysis tool provided by Georgia State uses Federal adjusted gross income, which excludes Social Security and certain other forms of retirement income. Federal AGI is only one of several possible ways that local governments calculate income, all of which have different ramifications.
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“I was struck, as I’m sure many of you were, that there are about nine different exemptions [in the City of Decatur] and they all use different definitions of income,” committee member Phil Cuffey said.
The committee discussed what types of income to consider, and also the possibility of creating different income thresholds for different age brackets. Pinkelton expressed a desire to see a more accurate breakdown of current income according to age.
The committee also discussed the ramifications of potential drops in tax revenue because of the COVID-19 pandemic.
Utz said that while property values would not likely be affected, predicted drops in sales taxes and other sources of revenue mean that the City Schools of Decatur is likely to be more dependent on property taxes. Meanwhile the state of Georgia has told all school systems to expect a 14% drop in Quality Basic Education revenue across the board.
“Short term we can make that work, but long term we would not be able to. That’s why the Board was so committed to that $1.2 million limit,” Dude said. “Even before this, we knew that we only have so much revenue.”
Clarification: This story has been updated to clarify a quote by Hans Utz regarding property taxes.
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