A less than expected tax digest for Upson County means the Thomaston-Upson School System may need to look for more revenue elsewhere. That revenue may need to come in the form of a small property tax millage hike that would keep tax revenue at the same level as this year. That was the news provided to the Board of Education at their June 10 meeting.
In May, the BOE approved a tentative 2014-2015 fiscal year budget of $32.8 million in the general fund, an increase of $1.3 million from the current budget. At that time, Finance Director Kathy Matthews projected that revenues would increase $1.3 million and expenditures would increase $1.4 million, and the $950,000 difference would be covered by the reserve fund balance.
In May, Matthews said they had budgeted property tax at $9,248,992 million. After deducting the Tax Commissioner’s collection fee of $231,225, that left property tax revenue at $9,017,767.
“That is 15.34 mills, which would generate about $603,000 for one mill of tax,” said Matthews in May.
But at the June meeting, Matthews reported changes to the tentative budget on the revenue side.
“QBE (Quality Basic Education) revenues were decreased by $21,000, but the biggest change of all came in local property tax revenue,” she said. “ Last week we received some dismal news from the Tax Assessor’s office. Our tax digest continues to shrink. The digest was reduced about $15 million due to industry closings, and there are a lot of foreclosures continuing in the community, and then bank sales for less than the value of homes.
“With that new information, we adjusted property tax revenue down to $9 million, and after the collection fee that we have to pay the (Tax) Commissioner’s office, we’re looking to receive about $8.8 million, which is $221,000 less than what we received last year,” Matthews said. “The value of a mill is looking right now to be about $588,000 as compared to $603,000 last year. So, rather than a deficit of $915,000 that was presented last month, we’re looking at about a $1.2 million deficit, which will still be covered by the fund balance.”
While the BOE is required to approve the new budget before the end of the fiscal year on June 30, they don’t usually set the tax millage rate until the August meeting, once the final tax digest numbers are provided by the Tax Commissioner. Matthews stated that at the August meeting they may need to consider a tax rollback to increase the millage enough to receive the same amount of tax revenue as they received this year.
“Based on the numbers that we received last week, it looks like there will have to be a millage rollback, if those numbers don’t change,” Matthews said. “State law does allow for taxing jurisdictions to collect the same amount of tax they collected the previous year. A rollback in the Tax Commissioner world means an increase in taxes, whereas a rollup means a decrease in taxes. I just wanted to make you aware that probably at the August meeting, you’re going to have to be thinking about things and looking at the millage rate.”
Board chair Keith Rohling asked if, at the present rate, the increase would be a little less than half a mill.
Matthews replied that would be so, but she said the preliminary numbers could change and could improve.
With no further discussion, Board member Angeline McGill made a motion to approve the FY2014-2015 budget. Board member Leon Fowler seconded the motion and it was approved, 7-0.
Larry Stanford may be reached at 706-647-5414 or on Twitter @LarryStanford7.