SUMMARY:

The bill calls for a special election on the question of increasing the amount of the state-wide homestead exemption from ad valorem taxation for state, county, and school purposes from $2000 to $4000 for the taxable year beginning January, 2009.  After January 1, 2010, the exemption increases by a percentage equal to the cost of living index.  If passed, the exemption would apply to city and city school district taxes.

REQUIREMENTS:

• A special election shall be called on the third Tuesday in June to consider whether the amount of the state-wide homestead exemption from ad valorem taxation for state, county, and school purposes shall be increased from $2000 to $4000 for the taxable year beginning January, 2009.  After January 1, 2010, the exemption would increase by a percentage equal to the cost of living index.
• Rules related to the cost of living index shall be established by the Commissioner, Department of Revenue. 
  • No adjustment shall be made should the cost of living index decrease.
• If passed, the exemption would apply to state, county, and school purposes.
• The homestead exemption granted by this Code section would be in addition to any other homestead exemption.

POINTS TO CONSIDER:

• The increased exemption would further decrease the ability of local governments, including school districts, to fund public education.  
• For the majority of school districts, the ad valorem tax is the only source of taxation available.
• The burden of determining the cost of living index allows a potential annual increase in the homestead exemption.
• The exemption applies to the state-wide ad valorem tax.

EFFECTIVE DATE:

January 1, 2009, if signed into law and if approved by the electorate.