HB 30 cut $2.9 million from Catoosa County school funding. HB 36EX won't fix it. Here's why.
It's easy to look at these two bills together and assume they balance each other out. They don't. They operate in legally separate accounts and there's no mechanism connecting them.
The LHOST created by HB 36EX is a sales tax whose proceeds go toward county government taxes: roads, county services, county operations. Georgia law governing LHOST (Article 2C of Chapter 8 of Title 48 of the O.C.G.A.) explicitly limits its application to taxes "imposed by the governing authority of the county." The Catoosa County school district is its own taxing authority. LHOST money cannot flow to it.
The LHOST exemption "shall not apply to or affect any ad valorem taxes other than those levied by the governing authority of the local government to which this Act applies."
School district taxes are levied by the Board of Education, a separate governing authority. The bill's own language excludes them.
Put simply: the hole HB 30 created in the school budget is not affected by LHOST at all. Even if a future LHOST proposal were to pass, the legal prohibition is baked into the structure. Schools see none of that money.
Property tax exemptions in Georgia can be written to apply across all taxing authorities. County taxes, city taxes, and school taxes can all share in any reduction. HB 30 was written to apply only to the school district's share. Not county. Not city. Just schools.
Every dollar of this exemption comes directly out of the school budget. No other part of local government absorbs any of the cost. If the goal were broad property tax relief for seniors, the relief would be spread across all taxing authorities. The targeting here is specific.
Through all of this, Catoosa County Public Schools has maintained one of the lowest millage rates in the region (13.862 mills as of 2025) and passed clean audits year after year. The financial pressure here is a policy problem, not a management one.
The $2.9 million HB 30 cut does not arrive in a vacuum. It lands on top of several other structural problems that have compounded over recent years.
The state required districts to hire literacy coaches and funded those positions at roughly $54,000 per year. After taxes and benefits, the net of that funding is closer to $25,000. Schools must cover the rest out of their own budgets. Another state requirement with a funding gap built right into it.
For years, Catoosa County properties were significantly underassessed. When the state required corrections, residential values jumped roughly 30% and commercial values jumped 60%. A higher property tax digest sounds like good news, but not under Georgia's school funding formula. The state calculates its Local Fair Share deduction directly from the digest, so as assessed values rose, the amount subtracted from CCPS's state allotment rose with them. The deduction grew by over $1 million in a single year. The equalization grant that exists to offset it shrank at the same time. The undervaluation was not the school district's error. The financial penalty landed on the school budget anyway.
On top of all of that, new state money often arrives already committed. Pension contribution rates and health insurance costs have both risen sharply, and those increases get paid before the money ever reaches a classroom. As one district put it: like getting a $1 raise when your insurance went up $2.
Option 1, raise taxes on everyone else: The school board can increase the millage rate on all non-exempt properties, which shifts the burden onto younger and working families who don't qualify for the senior exemption.
Option 2, cut: Reduce staff, programs, and services. Larger class sizes, deferred maintenance, fewer courses, less support for kids who need it.
The Catoosa County Board of Education has proposed raising the school millage rate from 13.862 to 15.750 mills. For a family in a $300,000 home, that works out to about $195 more per year in school taxes.
Some have called the increase unnecessary. But there's a straightforward explanation for it: the district's budget was cut by $2.9 million a year when HB 30 passed. When state legislators reduce school revenue, local school boards have two choices. They can raise the local millage rate to make up the difference, or they can cut programs, staff, and services. The board is choosing option one. You can debate whether that's the right call. But the pressure behind that choice was created at the state level, not in Ringgold.
Before HB 30 was approved by the legislature, Catoosa County Public Schools released its own financial analysis projecting a $2.9 million annual loss. That number was public information before the bill passed. The millage increase being proposed now is the arithmetic result of a decision that was made for the district, not by it.
HB 30 alone doesn't explain the full picture. Pension contribution rates have risen roughly 80% since 2014, and state-required health insurance costs doubled in 36 months. In FY2026 alone, those two mandates added $3.72 million in new costs that had to be covered before a single new hire or program was considered. All of that is on top of the assessment correction, the Local Fair Share increase, and the literacy coach gap described above.
The district cut $4 million from its budget and eliminated 70 positions the year before HB 30 was even passed. It has run one of the lowest millage rates in the region for years and consistently passes clean audits. A district absorbing state mandate costs, a $10 million formula funding loss, and now a $2.9 million exemption. At some point, the math catches up.
The Board of Education will hold three public hearings at the Catoosa County College & Career Academy, 190 Catoosa Circle, Ringgold. All residents are welcome to attend and speak.
Tuesday, July 7 at 6:00 p.m.
Thursday, July 16 at 10:00 a.m.
Thursday, July 16 at 6:00 p.m.
HB 36EX did not pass the Georgia House during the June 2026 special session. The analysis below reflects how the LHOST structure would have worked.
LHOST is designed to be roughly revenue-neutral for county government during the 10-year collection window (2028–2037). The 1% sales tax brings in money that offsets property tax relief for homeowners, so in theory police, fire, roads, and parks shouldn't see cuts during that period. But there are two real problems with this picture.
The LHOST sales tax stops collecting on December 31, 2037, but homestead exemptions continue through December 31, 2039. For those two years, the county owes homeowners the full exemption with nothing coming in to pay for it. That gap has to come from somewhere: either cuts to county services or a tax increase on other property owners.
A 1% sales tax is paid by everyone who buys goods in Catoosa County, including renters who don't own homesteads and get no property tax exemption in return. Lower-income households spend a larger share of their income on taxable goods, so they carry a bigger piece of the LHOST burden while seeing less of the benefit.
LHOST revenue is tied directly to sales tax collections, which fall in economic downturns. Because the homestead exemption amount is recalculated each year based on what the sales tax actually brought in, a recession doesn't just squeeze county revenue. It shrinks the property tax relief homeowners were counting on at the same time.
Georgia's own history shows how significant that can be:
| Recession | Georgia Sales Tax Decline | Impact on LHOST Homestead Exemption | County Services Risk |
|---|---|---|---|
| 2001 Recession Mild, about 12 months |
~5% decline in state sales tax collections | Exemption shrinks ~5% | Manageable; small gap to cover |
| 2020 COVID Sharp but brief |
~10–12% initial decline (partial-year) | Exemption shrinks ~10% | Moderate; offset by federal relief that likely won't repeat |
| 2008–09 Great Recession Worst-case scenario |
~17–20% decline, sustained over two-plus years | Exemption shrinks 17–20%; county also absorbs falling property values | Severe. The county takes a double hit: less sales tax revenue and lower assessed property values, both at once. |
A 2008-scale recession during the LHOST window would mean homeowners get less relief than they expected, the county collects less from the sales tax, property values fall and take property tax revenue down with them, and the 2038–2039 cliff arrives with a county government that's already stretched thin.
Recessions hit property values and sales tax revenue at the same time. A county that has built its budget around LHOST absorbs both losses at once, with nothing to cushion the fall. And the school district, already down $2.9 million a year from HB 30, faces those same falling property values with no LHOST cushion at all.