Newton County Chairman Keith Ellis heard residents’ request for officials to find a way to balance next year’s budget without raising the property tax rate, and he scrambled early last week to find an alternative.
However, the majority of county commissioners found the two alternatives — cutting 5 percent from every county department or dipping into the county’s reserves and threatening its credit rating — untenable and reached an informal consensus at Thursday’s work session to raise the millage rate from 10.91 to 11.59.
Amidst bouts of roaring thunder, contentious conversations about side issues and monologues about the state of the county, Ellis managed to bring the two-hour work session — the board’s seventh this year — to a close by asking commissioners to pick one of the four budgets presented Thursday.
The first time around, only one budget received two votes, but Commissioners Levie Maddox, Nancy Schulz and Lanier Sims all reluctantly supported going with a millage rate increase, and Ellis helped forge a compromise to get the majority decision needed to move forward.
Before and after the vote, the public expressed opposition to raising the millage rate, but the majority of the board felt that deeper cuts, including likely personnel cuts, or dipping into reserves would be equally irresponsible. The county has a reserve account for emergencies, but dipping into it threatens the county’s Aa2 credit rating, which if lowered, would increase loan and bond rates for the county and several other groups, including the hospital authority.
Technically, under state law, the board’s decision is not considered a tax increase, because the increased millage rate will not bring in more property tax revenue than last year. The board’s consensus was to approve the rollback millage rate (sometimes called the rollup rate), which adjusts the millage rate up or down to account for either a decline or increase in property tax revenues.
The rollback rate could be approved every year; however, part of the public’s hostility toward the rollback rate is that it never seems to be used to actually roll the rate back down when property values increase.
Commissioners talked about including some sort of sunset clause that would require the board to lower the rate in future years, but that decision will have to be made when the board officially votes on the millage rate later.
Maddox, Schulz and Sims all expressed concerns about increasing the millage rate, but they also said they felt the county needed to get to work immediately to start finding ways to increase other revenues so that property taxes don’t account for as much of the budget. Included in the approved budget is $50,000 for either an in-house or contracted grant writer, an additional $30,000 for the Covington-Newton County Chamber of Commerce for economic development and $9,500 for strategic planning, so the commissioners don’t find themselves having these same hand-wringing conversations next year. The hope is for grants and property tax and sales revenue from new businesses to increase.
Also, the consensus budget eliminates five furlough days for employees at a cost of $398,815 in wages. Employees will still have five remaining furlough days in fiscal year 2014.
Maddox also suggested the county needed to look everywhere for efficiencies, including energy audits on buildings and challenging department heads to find more savings. Commissioner John Douglas adamantly opposed any millage rate increase and said he was disturbed by the words of his fellow commissioners. He said he’s never seen a tax rescinded, pointing back to the supposedly-temporary MARTA tax, which was passed when Douglas was a junior in high school, yet is still in existence today.
“There is no such thing as a sunset on a tax. The SPLOST is a prime example of that,” Douglas said. “Talking about a temporary tax is smoke and mirrors. County finances are hurting because the finances of our people are hurting.
“We can’t sit up here and say we’re taking care of the people and doing this and that, and smile to their face when we’ve got our hands in their pockets and taking money out of their wallets.”
As a result, Douglas supported the budget option that would have cut 5 percent from every county department and every appropriation (library system, recreation department, economic development, health department, etc.).
The majority-supported budget is $45.95 million, while the budget supported by Douglas was a $45.12 million budget. Originally, it was projected that not raising the millage rate would result in a $1.25 million reduction in property tax revenue; the reason for only a $831,467 difference between the two latest proposals was not immediately clear. The millage rate and budget will have to officially be voted on later, but the 3-2 consensus makes it likely the county will see its first millage rate increase since 2010. The county’s overall tax digest — the value of all land, buildings, vehicles, timber and heavy equipment — has declined by around $1 billion since the housing collapse. The county’s fiscal year 2009 budget was $55.1 million.
Solid waste fee?
Commissioner J.C. Henderson didn’t support any of the four budgets, because they all called for the county to charge some type of fee for residents to use the recycling centers, a move Henderson felt was unfair because there had been no public hearing.
The county hasn’t yet made a formal decision to institute such a fee, but officials are planning an intense study of the landfill and recycling centers to see if extra revenue can be generated or money can be saved. The fee is projected to bring in $354,063 in revenue. When asked, County Manager John Middleton said the number is based on a simple calculation that took half the number of residentially-approved parcels in the county and multiplied by the suggested fee; neither the number of parcels nor suggested fee was mentioned Thursday.
Commissioners discussed having a public hearing soon on the matter; however, Maddox said he didn’t think there would be much solid data to present until later in the evaluation process. Officials are optimistic that the landfill can turn into a real money maker.
After the meeting, Ellis referred to a consulting firm’s take from earlier this year that said the county could possibly increase landfill revenues by nearly $3 million. The county will form a committee to study the landfill and recycling centers and try to find that revenue.
Effect on pocketbooks
Not everyone’s property values declined in 2013, as some residential areas of the county have begun to stabilize. If a home valued at $100,000 did not have its value change at all, that home’s owner would pay $27 more in county property taxes this year for a total of $463.60, if the millage rate is increased.
That is only the county maintenance and operation tax portion and does not represent a homeowner’s total tax bill. Another concern of officials is the effect the increased rate would have on local businesses and industries as well as the recruitment of new industries.
Ellis handed out a comparison map that showed the county millage rates were higher in Walton (12.41), Rockdale (16.91), Henry (14.5), Butts (14.4) and Jasper (15.44) counties, but lower in Morgan County (8.99). Rates were also significantly lower in outlying metro Atlanta counties, such as Carroll (8.5), Cherokee (5.82) and Fayette (5.46).
Nelson Heights Community Center
The only difference between the two rollback rate budgets presented by Middleton was whether the Nelson Heights and Washington Street community centers received $32,000 apiece or $40,000 apiece. Schulz supported only giving $32,000 for three reasons: because Washington Street only requested $35,000 originally, it’s under new, unproven management, and because Commissioner Henderson is the chairman of the Nelson Heights center board.
Schulz felt it was a conflict for Henderson to both ask for money as Nelson Heights board chair and then vote on that specific funding as a commissioner.
The county attorney’s office has already said it’s not a conflict for Henderson to serve on the board, but Henderson asked the county attorney’s office to rule on whether he could also serve as chairman.
After haggling, Ellis asked Sims and Maddox if they would support funding at $32,000 and then revisit the issue in December to see how the Nelson Heights board was performing; the commissioners agreed to the compromise.
The extra $16,000 was going to come from the Newton County Recreation Commission, which is expected to experience significant savings following the retirement of director Tommy Hailey and another employee leaving. T
The Recreation Commission will receive $1.62 million, $90,555 less than last year; after the meeting, Ellis said that was almost entirely due to expected savings in salaries.