State Representative Chas Cannon recently introduced legislation aimed at allowing local school boards to reduce ad valorem taxes. House Bill 987, approved by the House Education Committee, would reduce the minimum millage rate eligibility requirement for State Equalization Grants from 14 down to 10 mills.
“Back in 2015, the state set a baseline millage rate that a school system could not fall below if it wanted to remain eligible for state equalization grant funding,” said Rep. Cannon. “The baseline millage started out at 12 in 2015 and rose to a final millage of 14 in 2019. Well, a few things have happened since 2015. As most people may realize, the value of real property has risen dramatically over the last several years. So, the value of 14 mills across a county digest in 2019 is a good bit different than a value of 14 mills across a county digest in 2024. We’ve also seen a rise in the amount of sales tax collections, especially with the addition of internet sales. Sales taxes have traditionally softened the burden on millage-based property taxes.”
“Both the rise in local property values and an increase in sales tax collections should put downward pressure on millage rates,” adds Rep Cannon. “The only problem is – if a local school system is at 14 mills and has the ability to reduce their millage rate below that number, they could lose their state equalization funds, which in some cases is significant. On the other hand, some school systems have reduced their millage rate below the baseline of 14 mills and have continued to receive equalization funding from the state. We need to correct that and provide some accountability in the law.”
In addition to allowing school systems to lower their tax rate, HB 987 would also revise the definition of the term “qualified local school system” to allow schools to remain eligible for state equalization funding. The legislation would make it possible for schools to remain eligible by providing an enforcement mechanism which would reduce equalization for any school systems that set a millage rate or an equivalent millage rate below the new threshold of 10 mills.
“What this bill does is set a new baseline level of 10 mills. It also includes a claw back provision for any school systems that go below the new threshold of 10 mills,” said Rep. Cannon. “The claw back would be equal to 25 percent of their equalization grants. Some systems receive about $10 million in grants, so 25 percent represents a pretty significant chunk of the grant. We’re going to keep an eye on this, and if we still see a rise in property values across the state, we’ll try to come back and revisit this issue to see if we need to lower the threshold again. Ideally, I hope the state will approach this topic in the future from a tax digest-based value instead of a millage-based value. HB 987 is good tax policy and I think it will get support from the General Assembly.”
Representative Cannon credits his nearly 10 years of experience working in local government for the knowledge surrounding these types of local legislative issues. “We’ve been dealing with millage rates and sales taxes for several years,” adds Rep. Cannon. “Locally, we’ve really been able to roll back millage rates because of our sales tax, and now we are at our lowest millage since 1990. I’ve gotten a good bit of questions from other state representatives about how they can help their citizens back home. When I was at Fort Benning, I had a good battalion commander tell me to share ideas willingly, and that’s what we’ve tried to do in Atlanta. These changes to state law have the potential to save Georgia citizens a good amount of money.”
For more information on HB 987, click here.
Representative Chas Cannon represents the citizens of District 172, which includes Colquitt County and portions of Cook and Thomas counties. He was elected to the House of Representatives in 2023 and currently serves on the Agriculture and Consumer Affairs, Defense and Veterans Affairs and Health committees.