Voters in the City of Atlanta and Fulton County are set to cast their ballots on November 4 for new property tax exemptions targeting residents over the age of 65. The proposed adjustments aim to alleviate the financial pressure on senior homeowners, enabling them to remain in their homes despite rising property taxes. However, this initiative raises crucial questions about potential impacts on public school funding, particularly for Atlanta Public Schools (APS) and Fulton County Schools.
The three measures on the ballot intend to establish homestead exemptions that will ultimately reduce property tax bills for older homeowners. As metro Atlanta has experienced rapid home price growth over the last decade, many seniors—often living on fixed incomes—are struggling to keep pace with increasing tax bills.
In Atlanta, voters will have the opportunity to approve a measure that discounts the assessed value of their homes by $50,000 regarding the APS portion of their property tax bills. Meanwhile, in the areas of Fulton County outside Atlanta, voters will decide on two additional measures that offer a 25% property tax discount for homeowners over 65 and a 50% discount for those over 70 specifically for Fulton Schools.
The official ballot question for Atlanta voters reads:
“Shall the act be approved which provides a homestead exemption from city of Atlanta independent school district ad valorem taxes for educational purposes in the amount of $50,000.00 of the assessed value of the homestead for residents of that school district who are 65 years of age or older with an aggregate cap of $487,804,878.00?”
This proposed exemption limits total exceptions to just under $488 million, potentially restricting APS’s annual revenue loss to around $10 million. Based on the current APS millage rate, this could mean approximately $1,025 in tax savings for eligible homeowners. This measure was legislated via Senate Bill 330.
Fulton County voters will encounter two questions on their ballots regarding property tax exemptions for older homeowners. The first question probes voter approval for a 25% homestead exemption from Fulton County school district taxes for those aged 65 and older. The second asks voters to support a 50% homestead exemption for residents over the age of 70. Homeowners in Fulton, outside the city of Atlanta, must have lived in their homes for five of the last six years to be eligible, according to House Bills 776 and 777.
While both Atlanta Public Schools and Fulton Schools had opted out of a statewide homestead exemption earlier this year in an attempt to safeguard property tax revenue for education, the proposed local exemptions may lead to significant financial implications. APS estimated that opting out could have cost the school district approximately $30 million in its first year. Conversely, the new Atlanta exemptions would result in cutting less than 1% of APS’s budget, which stands at $1.85 billion.
Fulton Schools, however, might be more adversely affected by the percentage-based exemptions, as they manage a $2.46 billion budget. Colton Pace, CEO of Ownwell, a tax preparation company based in Texas, describes the proposed exemptions as groundbreaking. He notes that they would position Atlanta and Fulton as national leaders in property tax relief for seniors, emphasizing the innovation of these measures.
Pace, however, warns that if these exemptions are approved, both school districts will need to address the ensuing budget shortfalls.
Support for these property tax breaks comes from both Fulton Schools and the county commission. A spokesperson for Fulton Schools noted that the board of education acknowledges the need for measures to prevent the displacement of senior residents. The homestead exemptions were crafted in collaboration with legislative and county partners, as part of ongoing initiatives to support seniors.
Despite this support, the school system has stressed the financial pressure the district is under, with rising operational costs at a time when tax revenue could decline due to the exemptions. The district has developed a contingency plan to prepare for a fiscal adjustment of $93 to $95 million over the next five years, ensuring that they can continue providing essential services.
The implications of these exemptions may be compounded as Fulton Schools anticipates losing state funding alongside local tax revenue. This occurs during a period when they are confronting increasing costs for healthcare benefits, employee salaries, and inflation.
Fulton County Commissioner Bob Ellis has indicated that the demand for school property tax breaks among seniors has been one of the primary queries since taking office. He acknowledges the broader issue of housing affordability, noting that seniors face challenges compounded by fixed incomes and rising healthcare costs.
Tax breaks generally favor wealthier homeowners, as their properties are valued higher. However, experts suggest that the flat dollar amount exemption proposed in Atlanta would more effectively benefit lower-income seniors compared to Fulton’s percentage-based exemptions.
For instance, a senior homeowner living in a $10 million property who qualifies for a $5 million exemption under Fulton’s proposed 50% reduction may not find it equitable. In contrast, that same homeowner in Atlanta would receive a uniform $50,000 exemption, giving low-income homeowners a more significant advantage.
Local advocates for seniors argue that the potential loss in property tax revenue for schools is overshadowed by the direct benefits these exemptions would provide to older homeowners. John Butler, chair of the Atlanta Senior Care Network Niche, emphasized that for many seniors, property taxes continue to rise while income remains stagnant or declines.
He points out that tax relief can make a significant difference in a senior’s ability to remain in their homes. Saving even a small amount on property taxes can equate to extra funds available for critical needs like long-term healthcare, which many seniors must cover through home equity.
As the election date approaches, Atlanta and Fulton County voters will weigh the potential benefits of easing property tax burdens for seniors against the important financial needs of their school systems. Comments from officials and community advocates alike highlight the complexities involved in balancing support for senior citizens with the need to maintain quality education for future generations.
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