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Grady County’s new administrator and finance director unveiled a proposed 2020 operating budget Tuesday during the first, and possibly only, budget workshop held by the Grady County Commission this budget season.
The budgeted expenditures of $15,392,654 exceeds the county’s projected revenue in 2020 of $13,576,302 by $1,816,352.
Administrator J.C. (Buddy) Johnson III, and county finance director Holly Murkerson are recommending the county dip into its fund balance to cover the $1.8 million deficit but also consider increasing the county’s ad valorem tax rate by two mills to finance a list of proposed capital projects that the administrator says are needs and not wants.
Johnson and Murkerson also told county leaders Tuesday that should the Special Purpose Local Option Sales Tax referendum to be held in November fail to pass, an additional 2.75 mills would be needed to make up the loss in sales tax revenue, which in large part pays the debt service on the county’s long-term debt.
On Tuesday, after going over the budget by department, the board voted 3-1 to set a tentative millage rate of 4.75 mills. Commissioner June Knight opposed the tentative tax hike and Commission Chairwoman LaFaye Copeland had to leave the workshop early to go to a doctor’s appointment.
Vice Chairman Keith Moye, Commissioners Ray Prince and Phillip Drew told Knight that if the SPLOST passed, the county would roll back the 2.75 mills leaving a possible 2 mill tax increase rather than 4.75 mills, but Knight did not budge.
After voting to adjourn the meeting, county officials engaged in a discussion with Grady County Tax Commissioner Barbara Darus and it was determined, contingent on approval by the Georgia Department of Revenue, the county could delay setting a tentative millage until after the Nov. 5 referendum.
Regardless, if the tax hike is 4.75 mills or 2 mills, three public hearings on the tax increase will be required and the five year history of tax levy must be advertised at least seven days prior to the date of final approval of the millage rate.
Darus cannot submit the digest for state approval until the five year history has been published and a final tax rate is adopted, which typically is done prior to Sept. 1, according to the tax commissioner.
Based on that information, the consensus of the majority of the board still present, Moye, Prince and Drew, was to withdraw the tentative millage rate of 4.75 and they called for that decision to be ratified at the commission’s next meeting on Aug. 20.
The county commission is seeking to delay the mailing of tax bills until after the Nov. 5 referendum. Bills typically are mailed by Oct. 20 of each year and are due and payable on Dec. 20.
The tax commissioner and county officials discussed a plan to hold the required public hearings the weeks of Nov. 11 and Nov. 18, which based on how long it takes the state to approve the digest could push the mailing of the tax bills into early December.
“We want to do whatever we can so that people will have their bills before the end of the year so they can pay them in order to get the tax deduction off their federal income taxes,” Commissioner Prince said Tuesday.
County officials had anticipated moving forward with setting a tentative millage rate now, holding public hearings and then moving forward with final adoption of a tax rate once the outcome of the Nov. 5 election was known.
Commissioner Knight said that approving a tentative rate of 4.75 mills was “threatening folks” to vote for the SPLOST.
Commissioner Prince said the county had to make plans to cover the lost revenue should the referendum fail. Prince reminded Knight that they both agreed the sales tax was the fairest tax there is since everyone pays. He also noted that as the budget currently stands the county is only nearly $2 million short of revenue to balance the budget.
Administrator Johnson said the proposal he was recommending would end the “bleeding” and move away from covering the deficit with the dwindling fund balance.
“You have no choice but to hedge against the failure of the SPLOST,” Johnson said regarding his recommendation to consider the 2.75 mill tentative rate hike in addition to another 2 mills to finance capital projects.
Johnson explained that Murkerson had revised budgeted revenues to reflect line items that were not performing as anticipated in the current budget. He also noted that other items were not budgeted properly or had been budgeted wrongly.
The county administrator said that in the past the proposed budgets presented to the commission for approval were inaccurate. He says the 2020 spending plan is actually what the county needs to finance its operations.
“We didn’t know where we were at before,” Commissioner Prince admitted.
Commissioner Drew said the county had to get back on the positive side of the ledger at some point. Prince predicted, “It’ll get worse before it gets better.”
“You really need to look at what you’re buying,” Commissioner Knight said. She said that items have been presented for approval that were not budgeted and the board has approved the purchases anyway. “I’m not saying we didn’t need it, but a budget is a budget and you’ve got to stick with it,” she said.
Johnson took issue with her comment and said that he had not recommended the county purchase “a darn thing” that the county did not have to have. He also said it was not his responsibility that the county had budgeted improperly in the past.
Murkerson also suggested that once budget amendments are approved by the board some of the expenses concerning Commissioner Knight would have a budget through contingency.
Commissioner Knight offered a motion to set the tentative rate at 2.75 mills but her motion died for lack of a second.
“We didn’t get in this shape overnight and we won’t get out of it overnight. We’ve got to bite the bullet and do what’s right. There have been too many Band-Aids. We’ve got to sew up the wound whether it’s popular or not,” Commissioner Drew said.
By delaying the setting of a tentative millage and final adoption the board will have additional time to review the budget document and make revisions. All of the board members concurred that it is critical the SPLOST referendum be approved this fall.