HB 12: Education; grants; revise definition of qualified local school system

Georgia's equalization grant program (O.C.G.A. § 20-2-165) sends extra state funding to local school systems that have low property tax bases but still tax at a high enough rate. Current law requires those systems to levy a millage rate (the property tax rate used to fund schools) of at least 14 mills to qualify. This bill would lower that threshold to 10 mills starting July 1, 2025, making more school systems eligible or allowing eligible systems to lower their tax rate without losing all their funding. The bill also adds a penalty: if a school system cuts its millage rate below 10 mills after its grant amount has already been calculated for the year, the state would claw back 25 percent of that grant through a midterm adjustment. It also requires the Department of Education to report annually, by September 1, on grant amounts and which systems fell below the minimum rate, sending that report to House and Senate budget and education committees.

• Lowers the minimum millage rate (local property tax rate for schools) required to qualify for equalization grants from 14 mills to 10 mills, effective July 1, 2025.
• Creates a midterm penalty that cuts a school system's equalization grant to 75 percent of the original amount if it drops its millage rate below the 10 mill minimum after the grant was calculated.
• Requires the Department of Education to prepare an annual report on grant amounts, midterm adjustments, and ten-year grant totals for each recipient school system.
• Requires that annual report to flag any school system that received a grant while taxing below 10 mills, and to be sent to legislative budget and education committees by September 1 each year.

Local school systems with low property tax bases that rely on state equalization grants, especially those currently below the old 14 mill threshold; school boards deciding how to set millage rates; and the Department of Education, which must calculate awards and produce the new annual report.

Lowering the millage threshold could make more school systems eligible for state equalization funding or let existing recipients reduce local property taxes without fully losing grants. The new clawback provision means systems that cut taxes after grants are calculated would lose a quarter of that funding.

• Section 1 revises paragraph (a)(9) of O.C.G.A. § 20-2-165 to change the 'qualified local school system' definition, replacing the prior phased schedule ending at 14 mills with a flat 10 mill minimum starting July 1, 2025.
• Section 1 adds subsection (d.1), imposing a midterm adjustment that reduces a school system's equalization grant to 75 percent of its initial amount if the system's millage rate falls below 10 mills after the grant was calculated.
• Section 1 adds subsection (f), requiring the Department of Education to issue an annual report on grant amounts, adjustments, and ten-year totals, identifying systems that received grants while taxing below 10 mills.
• Section 1 requires the annual report to be delivered by September 1 each year to the House and Senate Appropriations Committees, House and Senate education committees, and state and legislative budget offices.
• Section 2 repeals all conflicting laws.

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

• Charles Cannon (R, HD-172)Patrocinador principal
• 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