HB12: HB12 Education; grants; revise definition of qualified local school system

Georgia's equalization grant program sends extra state money to school districts with low property values so they can raise enough revenue for schools. To qualify, a district currently must levy a minimum property tax rate (millage rate) of 14 mills. This bill lowers that minimum to 10 mills starting July 1, 2025, making it easier for districts with lower tax rates to qualify for the grants. The bill also adds a penalty: if a district's grant has already been calculated for the year but the district then cuts its tax rate below the 10-mill minimum, the state will reduce that district's total equalization grant to 75 percent of the original amount. It also requires the Department of Education to report annually, by September 1, to legislative budget committees on which districts received grants, any midterm reductions, and which districts fell below the 10-mill threshold.

• Lowers the minimum millage rate (local property tax rate) a school district must levy to be a 'qualified local school system' eligible for equalization grants, from 14 mills to 10 mills, effective July 1, 2025.
• Cuts a district's total equalization grant to 75 percent of the original amount if the district later lowers its tax rate below the new 10-mill minimum after its grant was already calculated.
• Requires the Department of Education to prepare an annual report on every district that received an equalization grant, including grant amounts, any midterm reductions, and ten-year grant totals.
• Requires that report to flag any district that received a grant while taxing below the 10-mill minimum, and to send it to House and Senate budget and education committees and state budget offices by September 1 each year.

Local school districts across Georgia, especially those with lower property tax rates that currently fall short of the 14-mill threshold; school boards deciding tax rates; and the Department of Education, which must calculate grants, apply midterm reductions, and produce the new annual report.

Districts that tax below 14 mills but at least 10 mills would become newly eligible for state equalization funding, potentially increasing state aid to lower-tax districts. Districts that cut taxes after receiving a grant would lose 25 percent of that grant, creating a financial incentive to maintain tax rates.

• Section 1 revises O.C.G.A. § 20-2-165(a)(9) to change the millage rate threshold for a 'qualified local school system' from 14 mills to 10 mills, effective July 1, 2025.
• Section 1 adds subsection (d.1), reducing a district's total equalization grant to 75 percent if the district's millage rate drops below 10 mills after the grant amount was already calculated for the year.
• Section 1 adds subsection (f), requiring an annual Department of Education report on grant amounts, midterm adjustments, ten-year totals, and districts taxing below 10 mills, due to legislative committees by September 1.
• Section 2 repeals conflicting laws.

1. 2025-04-04House Withdrawn, Recommitted (House)
2. 2025-02-28House Committee Favorably Reported By Substitute (House)
3. 2025-01-15House Second Readers (House)
4. 2025-01-14House First Readers (House)
5. 2025-01-13House Hopper (House)

• Charles Cannon (R, HD-172)Primary sponsor
• Chris Erwin (R, HD-032)
• Rob Leverett (R, HD-123)
• John Corbett (R, HD-174)
• Trey Kelley (R, HD-016)
• Jaclyn Ford (R, HD-170)

• school funding
• property taxes
• equalization grants
• education policy
• millage rates