Newton County commissioners have a lot of work left to do for next fiscal year’s budget, including decisions on whether to raise the property tax rate, fund any of the $5.4 million in additional department requests or institute a fee to use recycling centers.
Commissioners held their fourth budget meeting Monday night, but the bulk of difficult decisions remain to be made, beginning with what to do with the property tax rate as property values continue to decline.
Raise the property tax rate?
After four straight years of cuts, the county actually saw total revenues increase slightly last year, but that could be a one-year anomaly unless the Board of Commissioners decides to raise the property tax rate – also known as the millage rate.
The county’s tax digest – the total value of all land, buildings, vehicles and heavy equipment – has declined every year since the housing collapse and will decline again this year, according to county officials. Property tax revenue pays for about half of the county general operations.
If the board keeps the current 10.91 property tax rate, it would receive $1.3 million less in property taxes in fiscal year 2014, County Manager John Middleton said.
In order to receive the same amount in property tax revenue as it did in the current year, the board would have to raise the millage rate to 11.59.
This is known as the rollback rate (some people say "rollup" if the rate increases) and is designed to simply be a math calculation that keeps property tax revenue at the same level year to year.
Approving the rollback rate is not officially considered a tax increase, as property owners theoretically pay the same as they did last year; however, not all owners have their property values decrease at the same level or at all.
Commissioner John Douglas said he and many fellow District 1 residents did not see their values fall, which means they would pay more in taxes with the rollback rate.
Commissioner Nancy Schulz said she understood that most of the drop in property tax values was actually in commercial properties this year.
In the past few years, it’s generally been residential properties that have seen their values plummet, but they might be stabilizing while commercial properties experience a decline.
The owner of a home valued at $100,000 would pay $436.40 in county property taxes currently.
That same homeowner, assuming the property’s value didn’t change, would pay $463.40 if the county property tax rate were raised to 11.59.
The county property tax rate was last raised in fiscal year 2011, which began July 1, 2010.
Since its height in 2008, the tax digest has declined from a total value of $2.95 billion to $1.95 billion last year. The 2013 digest hasn’t been finalized.
The county had budgeted revenue of $44.89 million for this year’s budget. Without a tax increase for next year, the board would have to trim more than $300,000 from the current budget level and be unable to add anything without a corresponding cut elsewhere.
If the 11.59 rate were used, the county’s revenue would increase to $45.86 million thanks to increases in other revenues as well. Property tax revenue would remain stable at more than $21 million.
Schulz said she wanted to see the impact on homeowners and business owners before deciding which property tax rate to support.
Middleton said officials talk about hopes and dreams, but the only way to make things a reality without cutting other services is to increase revenue.
Fund any new requests?
The decision commissioners make regarding revenue will affect what they can fund on the expense side, where there are dozens of decisions to be made.
This year, the county had $44.89 million in budgeted expenses – matching its budgeted revenues – but requests from department heads for next year total $50.37 million, including $3.85 million in new requests from the Newton County Sheriff’s Office alone.
Adding to that number could be requests from commissioners themselves, some of which were presented Monday.
Chairman Keith Ellis said he would like to see the county hire a part-time county public information officer to deal with public and media requests and free up employees.
He said the position could improve customer service and serve as a gatekeeper for information.
Commissioner Lanier Sims brought up an old request for the county to look at hiring a grant writer. County Manager Middleton said some department heads have people who handle grants for their departments, but there is no county-wide person actively seeking new grants.
Commissioner J.C. Henderson requested increased funding for three facilities in his fourth district. He asked for $40,000 apiece for the:
• Nelson Heights Community Center (it had been receiving $32,000 a year);
• Washington Street Community Center (it received $27,500 this year, but requested $36,000 for next year);
• New Leaf Workforce Development Center ( a new venture that would be in partnership with the city of Covington).
Henderson recently was appointed chairman of the newly-created committee that oversees the Nelson Heights Community Center.
The New Leaf program would provide workforce development for local residents and be housed at a multi-use center in the Walker’s Bend subdivision.
The next budget meeting is at 7 p.m. Monday at the Historic Courthouse. The budget is scheduled to be adopted at the county’s June 18 meeting. Fiscal year 2014 will begin July 1.