City and school tax rates locked in as county ponders what to do
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Both the Cairo City Council and the Grady County Board of Education locked in the 2019 ad valorem tax rate last week, but the Grady County Commission is still weighing options and awaiting the results of the Nov. 5 Special Purpose Local Option Sales Tax referendum.
During the Cairo City Council meeting on Aug. 26, the council voted unanimously to approve the recommendation of City Manager Chris Addleton to set the 2019 ad valorem millage rate at 7.710 mills.
The council also introduced the budget ordinance that will be voted on Monday night and will put in place the legislative action required to levy the 7.710 mills of property taxes for property owners within the corporate limits of Cairo.
Then, last Thursday at 7:30 a.m., a special called meeting of the Grady County Board of Education was held and the board set the final 2019 millage rate at 13.6 mills.
The 2019 tax bills will be mailed later than customary this year, but in order to be able to mail them as early as possible following the Nov. 5 sales tax referendum, Grady County Administrator J.C. (Buddy) Johnson III, is recommending the county commission adopt a worst case scenario and set the tentative millage rate at a rate sufficient to generate the revenue that would be lost should the sales tax referendum fail.
By moving forward with adopting a higher than necessary rate, the county commission could schedule and advertise the first of three required public hearings on the tax increase prior to the Nov. 5 referendum and then set the third and final hearing for two days after the election.
It would be at the third and final public hearing when the county commission would set the final millage based on the results of the election and then the digest could be submitted by Grady County Tax Commissioner Barbara Darus to the state for its approval. Once the state approves the digest, the tax commissioner would have the green light to mail tax bills.
Johnson had previously planned to advertise a tentative millage rate following the referendum and proceeding with the required three public hearings over the course of the next two weeks rather than advertising a rate higher than what the county would need to cover expenses and debt service should the sales tax be defeated. By waiting, Johnson reasoned, the county commission would know if it would have the sales tax proceeds or not and could set the millage rate accordingly.
Since that time, Johnson has learned that public notice of the first two of three public hearings must be provided to the public seven days prior to the hearing dates. A five year history of the county’s tax levy and the tentative millage rate must also be advertised seven days prior to the first two of three hearings. Then, there must be seven days between the date of hearings #1 and #2 and the third and final hearing.
Based on the required advertising and timeline, Johnson is now recommending the county commission look to schedule the first two public hearings at 9 a.m. and 6 p.m. on October 22 with the third and final hearing being held on Nov. 7 at a time to be determined.
“This would allow for the tax notices to go out sooner than the end of the month or even into December,” Johnson told The Messenger.
The county administrator told commissioners Tuesday the sooner the tax notices can be processed and mailed the less impact the delay would have on other local governments.
Grady County School System finance officer Dan Broome has previously told school board members that the school system may require a Tax Anticipation Note to cover cash flow needs until ad valorem taxes begin to come into the county treasury.
County Administrator Johnson reminded county commissioners this week that the tentative millage rate could be set high and could be “rolled back” to a lower level once the outcome of the sales tax referendum is known, but the county could not advertise a tentative rate and then increase that rate should the referendum fail.
Comments were voiced Tuesday by a local resident that the commission was threatening the public to vote for the sales tax or face increased property taxes.
Johnson denied those claims. “I don’t see where a threat has been made. It is the reality of the situation. How we pay our bills is completely up to the taxpayers. If they decide not to pass the SPLOST, then we’ve got to get it from millage. It’s not a hostage issue,” Johnson said.
Commissioner Ray Prince said that the public also has to decide what is the fairest tax and in his opinion that is the sales tax.
The county administrator said there were still details in his plan to be ironed out and that he was not requesting any vote or decision this week. “We will have it right when the time comes to have it right,” Johnson said.
County officials say that the revenue generated by SPLOST is equal to a 2.75 mill tax hike, which would be required to meet all of its debt obligations should the tax not be approved.
A citizen also questioned comments made by local officials that the SPLOST is not a new tax. It is a new, six-year tax, but commissioners emphasize that it does not increase the amount of sales taxes local residents are currently paying.
Tax bills typically are mailed prior to Oct. 20 and are due on Dec. 20. While no matter what the county does, at this point the tax bills will be going out later, but Johnson’s desire is to mail them as early as possible in November so that taxpayers can pay their taxes prior to Dec. 31 and receive applicable income tax deductions on the amount paid in local property taxes.
The county administrator also said he was hopeful that shifting the process forward as much as possible may aid the school system and help them avoid having to borrow funds to cover operations prior to property tax collections being received.