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Grady County administrator J.C. (Buddy) Johnson III, acknowledged Tuesday that Grady County officials are in a pickle regarding the adoption of an ad valorem tax millage rate. With the potential loss of millions of dollars from a one percent sales tax a possibility, county leaders are in a quandary as to how to proceed with the budget writing process.
The biggest issue facing county commissioners and the administrative staff is how to budget for debt service on the county’s long-term debt should the Special Purpose Local Option Sales Tax referendum be defeated in November.
“I’m not advocating raising the millage rate, but the voters have got to pass the SPLOST or we have to raise the millage rate. One or the other has to happen,” Johnson said.
County officials say a three-mill tax increase would be required to make up for the loss in revenue from SPLOST that is currently used to pay the debt payments on the 2010 and 2015 bonds issued for the Tired Creek Lake project, which currently totals $1,679,806 annually.
However, the county cannot wait until after the referendum vote takes place in November to set a tax rate without delaying the mailing of tax bills and pushing the due date for taxes into 2020.
The county will collect SPLOST under the current tax through March 31, 2020, but unless the voters approve renewing the one percent sales tax, that leaves the county with nine months of lost revenue that would be used to service the long-term debt and must be made up somehow.
“If the SPLOST doesn’t pass, we’ve got to have a fallback plan in place,” Johnson said Tuesday.
The county administrator said he is looking at all options and has not ruled out the possibility of delaying the mailing of tax notices until after the results of the November referendum are known, which would push the due date for taxes into January or February, depending on when the bills are mailed.
“The SPLOST has got to pass,” Commissioner Ray Prince said Tuesday. Johnson agreed and noted that everyone pays sales taxes, including those visiting or passing through the county.
“It’s not a new tax, it’s a continuation of what we already have,” Prince added.
Should the county delay sending out tax bills, that would also impact the collection of ad valorem taxes for the cities of Cairo and Whigham as well as the Grady County Board of Education.
Johnson said the idea of setting a tentative millage rate increased high enough to cover the revenue shortfall should the SPLOST referendum fail had been discussed, but in order to maintain the regular schedule of taxes being due by Dec. 20, that is not an option.
Typically, by this time the county has completed its budget workshops with constitutional officers and county department heads and is preparing to adopt a tentative millage rate and scheduling required public hearings if a tax increase is proposed.
Johnson said, “in the next few weeks” he would be scheduling budget workshops. The county administrator said that he and county finance director Holly Murkerson had been working with the constitutional officers and department heads to finalize the budget, but he said he wanted them to have the opportunity to make the case to the commissioners for their budget requests.
County officials have not yet received the tax digest from Grady County Tax Commissioner Barbara Darus and that is needed to determine the amount of money one mill of tax will generate but expect to have it in about two weeks.
This would not be the first time that tax bills were delayed in being mailed. Most recently, in 2009, due to issues with the tax digest bills were delayed and were not mailed until November, which pushed the due dates into 2010.