City of Atlanta and Fulton County voters will decide on Nov. 4 whether to create new property tax breaks aimed at helping seniors stay in their homes — even if it means less money for public schools.
Three ballot measures would establish new homestead exemptions for homeowners over age 65, reducing their property tax bills — but they could also cut tax revenue for Atlanta Public Schools (APS) and Fulton County Schools.
A homestead exemption lowers a property’s taxable value, reducing the amount that homeowners have to pay in property taxes. Metro Atlanta home prices have risen rapidly over the past decade, which has sharply increased the property tax bill for older homeowners, who are often living on fixed incomes.
The ballot questions — one for Atlanta voters and two related measures for Fulton voters outside the city — confront a critical question in the fast-growing region: How can local governments help older residents stay in their homes, while also adequately funding education?
For homeowners over 65, Atlanta voters will decide whether to discount their assessed homestead value by $50,000 for the APS portion of their property tax bill. Fulton residents outside of the city will vote on giving homeowners over 65 a 25% discount on assessed homestead value — and separately, a 50% deduction to those over 70 — for their Fulton Schools property taxes.
In the city of Atlanta, voters will see the following ballot question:
- 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?
The measure caps total exemptions at just under $488 million, which limits APS’s potential revenue loss to roughly $10 million per year. The Center for Civic Innovation estimates that would be worth $1,025 in tax savings for eligible homeowners, based on the current APS millage rate.
The ballot measure was legislated by Senate Bill 330.
In Fulton County, the following two questions will be on the ballot:
- Do you approve an act to provide a new homestead exemption from Fulton County school district ad valorem taxes for educational purposes in the amount of 25 percent of the assessed value of the homestead for certain residents of that school district who are 65 years of age or older?
- Do you approve an act to provide a new homestead exemption from Fulton County school district ad valorem taxes for educational purposes in the amount of 50 percent of the assessed value of the homestead for certain residents of that school district who are 70 years of age or older?
To be eligible, Fulton homeowners outside of Atlanta must have lived in their homes for five of the last six years, according to House Bill 776 and HB 777.
Give and take
Both APS and Fulton Schools opted out of a statewide homestead exemption earlier this year to preserve property tax revenue. APS estimated that the state program could have cost it $30 million in the first year alone. By contrast, the proposed new Atlanta homestead exemption would cut less than 1% from APS’s $1.85 billion budget.
However, Fulton Schools could face steeper impacts from the proposed percentage-based exemptions to its $2.46 billion budget.
One property tax guru said both proposals, if passed, would make Atlanta and Fulton national leaders in property tax relief for older homeowners. “These are very big exemptions, bigger than the majority of the country has for seniors — an aggressive way to keep seniors in their homes,” said Colton Pace, the CEO of Ownwell, a Texas-based tax preparation company.
But, he added, “There will be a hole that needs to be filled,” for Atlanta and Fulton’s public school budgets, if voters approve the new homestead exemptions.
Backed by Fulton Schools
Both Fulton Schools and the county commission are backing the extra property-tax discount for older homeowners.
A Fulton Schools spokesperson told Atlanta Civic Circle in a statement that Fulton’s board of education recognizes the need for anti-displacement measures for seniors. The proposed homestead exemptions “were developed with our legislative and county partners as part of ongoing efforts to support seniors,” the statement said.
But the statement added that the Fulton school system is facing significant financial pressure, cautioning that it will lose tax revenue at a time when operating costs are increasing. (The school district has adopted a contingency plan “to prepare for a $93 to $95 million fiscal adjustment over five years, ensuring [Fulton Schools] can continue delivering essential services while honoring its commitment to students and the community,” the statement adds.)
“If the exemptions pass, the impact will be compounded by a loss of state dollars that goes above and beyond the potential loss of local tax dollars the senior exemption will add, at the same time the district is managing higher costs for health benefits, employee compensation, and inflation,” the statement said.
Fulton County Commissioner Bob Ellis said that seniors asking for a break on their school property taxes is “one of the top questions I’ve received since I’ve been in office.”
“We all know the challenges with housing affordability,” he added. “Seniors clearly face that same challenge as they migrate to a fixed income or lesser income, healthcare expenses, or other expenses.”
Who benefits most?
Property tax breaks typically benefit wealthier homeowners the most, since their homes are worth a lot more. But Pace, the tax expert, said that low-income seniors would benefit more from Atlanta’s dollar-amount discount than Fulton’s percentage-based one.
“If a 75-year-old living in a $10 million home is getting a $5 million exemption, that doesn’t seem fair,” he said, referring to Fulton’s proposed 50% reduction in assessed home values for homeowners over 70.
But if that rich homeowner lived in Atlanta, they would get the same $50,000 exemption as their neighbor in a $250,000 home. So in the Atlanta case, the lower-income homeowner benefits more.
One local senior advocate said the loss in property tax revenue to local school systems from the proposed homestead exemptions pales in comparison to the benefits for older metro Atlanta homeowners.
“When you get to be a certain age — beyond the age of having school children — your [property] taxes continue to increase and your income flattens out, and then becomes static,” said John Butler, chair of the Atlanta Senior Care Network Niche.
“Anything that provides a substantial relief in the cost of continuing to live in your home is going to have a direct and dramatic impact on that senior’s ability to continue to live in that county or city,” Butler said.
Every dollar saved on the property tax bill could be a dollar spent on long-term care, Butler added, explaining that a lot of older homeowners must borrow against their home equity to fund their increasing healthcare expenses. “One of the few assets — and one of the most significant assets — many seniors have is their home,” he said.
See what else is on your ballot at the ACC Election Hub.