The good news is that property tax bills for about 40 percent of tax payers will stay the same as last year, since local millage rates are slated to remain at the same level and property assessments are frozen for three years.
The bad news is that county residents who claim a homestead will be paying significantly more on their property tax bills this year due a planned roll back of the Homestead Option Sales Tax exemption, prompted by falling sales tax revenue and the disappearance of the state Homestead Tax Relief Grant.
In a press conference Aug. 4, Chairman Richard Oden, Tax Commissioner Dan Ray, Finance Director Roselyn Miller and former County Attorney John Nix presented information on the proposed rollback, along with options the county considered to address the $3.3 million budget shortfall.
Under the proposed HOST exemption rollback, residents who claim a homestead, which makes up about 60 percent of county property owners, will now have only 80 percent of county portion exempted from their property tax bill instead of 100 percent. This was previously completely exempted by using funds collected from the 1-cent HOST sales tax.
In addition, those residents will also feel the impact of the state legislature not giving the state HTRG this year due to the state budget shortfall. Rockdale would have received about $2.5 million in HTRG funds.
For example, last year, a homesteaded house that's valued around $150,000 would have about a $1,625 bill with $286 in HTRG credit and $537 in HOST credit, for a total due of around $800.
This year, however, the same house with the same millage rates and same value would have no HTRG credit and only $523 in HOST credit for total due of $1,102.
The owner of a $75,000 homesteaded house would see the tax bill amount due increase from $158 to $371. The owner of a $300,000 homesteaded house would see the tax bill amount due increase from $2,088 to $2,563.
A drop in tax revenue is fueling the rollback, pointed out Miller and Ray. For the first time since 2002, the total amount of county tax revenue collected shrank slightly by .01 percent, according to Ray. Last year, only $13.6 million was collected in HOST funds - about $3.3 million less than what was needed to give the full HOST exemption for this year. Miller said this year's HOST collections, which will determine the 2010 HOST exemption, are shaping up to be about $200,000 less per month than usual.
The HOST exemption is based on the previous year's tax collection.
Nix said after looking at the law, he had determined that the Board of Commissioners could not set the HOST exemption rate and that amount was determined solely by the previous year's tax collection.
"Initially, one of the reactions from the BOC was, ‘If we're going to be at 80 percent, let's do something about it,'" said Nix. One of the ideas floated was to draw on the reserve to cover that remaining 20 percent, he said.
"Well that's contrary to the law, because the law says (Tax Commissioner) Dan Ray sets the tax bills based on the collections from the prior year and the collections dictate how much the exemption is going to be," Nix explained. "If the money wasn't collected in sufficient amount to fund a 100 percent, it's not 100 percent."
"The idea to pay it through the reserve would be giving a gratuity, which is contrary to the constitution."
Another option would be to roll back the county portion of the millage rate from 14.53 mills to 11.7 mills to compensate. However, that would require a budget cut of $8.1 million before the end of the year, said Ray.
"That would be massive layoffs and massive cuts in services," said Ray. "When you look at the budget between the jail, the sheriff and the fire (department), you'd basically have to shut down the rest of the county government to achieve something like that."
The BOC will vote on the proposed HOST exemption rollback on Aug. 20.