Tobar produces budget document in response to issue of tax equity
Grady County Administrator Carlos Tobar has presented county commissioners and the Cairo Mayor and Council with a budget document this week that indicates that county ad valorem taxes paid by city residents are not being used to fund solid waste, volunteer fire department, code enforcement, Roddenbery Memorial Library, economic development, or county code enforcement in accordance with the Service Delivery Strategy.
Members of the city council had recently raised questions about the issue and requested verification that countywide ad valorem taxes were not being used to fund those operations.
Prior to this week, county budget documents did not break down by department the revenues used to finance the various departments and constitutional offices but the county administrator has now produced spreadsheets that do delineate the income sources.
Tobar is quick to note that his revenue breakdowns by department are “arbitrary.”
“Although we had never been asked to present the budget this way, I believe it was long overdue and a very reasonable request,” Tobar said this week.
Tobar said he has been involved in debate over tax equity in previous jobs.
“Tax equity is a major issue when you have service agreements between agencies. It is the main reason the city of Elk Grove broke away from the Sacramento Regional Transit District in California,” Tobar said.
He added, “Here, the calculations were easy and in this case the city of Cairo residents receive far more service than they pay for.”
According to Tobar, city residents pay $2,228,182 of the $7,368,801 of countywide ad valorem taxes.
“Total expenses for the city and county services in 2016, per the Service Delivery Strategy, is $9,662,365. If you multiply that figure by the city’s population, then the city of Cairo residents receive $3,710,348 in county service, but only pay $2,228,182. In terms of tax equity that is a great deal for city residents. It means that the county is using other revenues to keep property taxes down for both city and county residents,” Tobar said.
Cairo City Manager Chris Addleton says the question is not whether city residents are getting a great deal, but whether their tax money is going towards services they’re not receiving, such as volunteer fire, code enforcement or solid waste, or to services they are already paying for through city taxes such as Roddenbery Memorial Library, Southwest Georgia Regional Commission or Grady County Joint Development Authority. Addleton says the service delivery strategy was legislated by state lawmakers about 15 years ago to ensure there is no duplication of services or double taxation. The strategy is part of the city’s “comprehensive plan.”
The presentation Tobar will make to the Cairo City Council next week shows that some departments are being funded with proceeds from the Local Options Sales Tax (LOST), fees, and other sources of revenue.
“I hope presenting this budget satisfies the city council, but they may raise other issues or request other information. I will state to the city council that Grady County is fiscally conservative and they can be proud of the board of commissioners’ stewardship of county finances and the Service Delivery Strategy,” Tobar said.
At the Cairo City Council’s Nov. 23 meeting, Councilman James H. (Jimmy) Douglas, who is a certified public accountant, said that when he looks at the tax bills for his clients who are residents of the unincorporated areas of the county, he sees they are paying the same tax rate he pays as a city resident.
“I, as a city resident, should be paying a lower tax rate than what a resident of the unincorporated areas of the county is paying, but that’s not happening,” Douglas said on Nov. 23.
Douglas said that if the service delivery strategy stipulates certain services are paid for with revenues from the unincorporated county then city residents’ county tax rate should be adjusted accordingly.
City officials also told Tobar they did not want to end up battling over the issue in court as happened with the city of Bainbridge and Decatur County.
During the regular meeting of the Grady County Commission last week, commissioners were concerned that Councilman Douglas even mentioned the word “sue.”
Commission Chairwoman LaFaye Copeland said, “We want to make sure the issue is clarified.”