Whitfield County Commission Chairman Mike Babb admits that some taxpayers will just see the bottom line when they open their tax bills sometime next month. But still, the veteran leader would like to explain the many factors that have come to a head in the past few months and forced the commissioners to address the millage rates for County M&O. “The Board of Commissioners will be accused of having a spending problem,” Babb said. “But an evaluation of the budget and a comparison to counties of equal size will show that we’ve got more of a revenue problem than a spending problem.” He believes that the commissioners, outside influences, and voters themselves all share some of the responsibility for the board’s decision Thursday to set the millage rate at 2.0 mills for property outside the corporate limits of the city of Dalton that makes up the special tax districts. Revenues are down for most county governments across Georgia, and Whitfield County is no exception. Here are some of the reasons for the local decline, according to Babb. Commissioner decisions: With Whitfield County’s unemployment rate still among the state’s highest, the commissioners have made it a priority to lure new industries here. And as the old saying goes, you’ve got to spend money to make money. For instance, one mill of next year’s budget will go to make payments on bonds used to build the new Carbondale Business Park next to I-75 and address other economic development issues in business recruitment and retainment. Some might argue that the business park wasn’t necessary, “but, according to the JDA, the business park is what is drawing the attention of the state economic development leaders and prospective new businesses to our county,” Babb said. Sometimes getting a company to close the deal means offering incentives, like not having to pay property taxes for several years. That cuts into the county’s revenues, but commissioners believe the new jobs are worth it. Likewise, the commissioners voted for 100 percent Freeport, which essentially means companies don’t have to pay inventory tax on certain types of inventory. That also reduces the county’s revenues (by approximately $2.4 million each year), but again the board believes that it’s necessary to keep Whitfield County on a level playing field with other counties along I-75. Also cutting into revenues is the state legislation to phase out sales tax on the electricity used by manufacturers. The commissioners could have implemented what’s known as an energy excise tax to make up this loss of revenue, but again they feel such a decision would make Whitfield less attractive to new industries. And, for years, the county has had one of the highest homestead exemption rates in the state. At $20,000, it’s 10 times the customary amount of $2,000. The $20,000 homestead exemption translates into roughly a $2.1 million reduction in property tax collections here, according to Trammell Suddeth at the Tax Assessor’s Office. Outside influences: The county is forfeiting $887,000 in sales tax revenues this year because a local manufacturer mistakenly paid sales tax on millions of dollars worth of new equipment in the past and the state has ruled that the tax must be refunded to the company in 2013. To give an idea of how this affects the county budget Babb points out that the total budget this year for the county parks and recreation department is $880,000. Even tougher on county revenues is the loss of approximately $3 million for 2013 that was redirected from the county treasury to the city of Dalton treasury as a result of the recently negotiated LOST (Local Option Sales Tax) agreement. State legislation passed in 2009 concerning the sales tax negotiations had the local result of weakening the county position and strengthening the city position for the negotiations. In some parts of the state the opposite was true depending on the particular situation. Even without the $3 million reduction from the county’s LOST collections, however, Whitfield sales tax collections would still be down in 2013, primarily because of the new ad valorem tax law on vehicles. Basically, that law eliminates sales tax on new cars and replaces it with a one-time fee known as a TAVT. While the county does get part of the TAVT, it’s not nearly enough to make up the other revenue losses from other sources. Given all the factors affecting the LOST, actual LOST collections for the county treasury through July of 2013 are down 39 percent compared to collections for the same period in 2012. The commissioners will be creating Special Tax Districts for that part of the county outside the city limits of the City of Dalton. That’s the result of a lawsuit settlement elsewhere in the state that ruled city residents shouldn’t be taxed by counties for services that the city already provides, things like fire protection and garbage disposal. At a special called meeting Thursday, the county approved a special millage of 2.0 mills for each special tax district to fund the fire department and a few other special services. Citizen decisions: Whitfield County currently has a 6 percent sales tax rate because voters turned down a SPLOST (Special Purpose Local Option Sales Tax) last year, while every other county in the immediate area does have a SPLOST. That means any capital expenditures, like major road improvements, must come out of the county’s general fund. The SPLOST is seen by the commissioners as a way to give relief to the property taxpayer by paying for some items through sales taxes rather than property taxes. Also, the county TSPLOST, which had used $55 million in sales tax collections to fund several local road projects over the past few years, has come to an end, so the county’s only source of road paving funds for the foreseeable future, other than the small amount through the state’s LMIG program, is property taxes. Since a mill generates about $2 million locally, to raise $55 million through property taxes would require an extra five or six mills a year over a five- or six-year period to raise the same funds as the county TSPLOST. “People ask, why can’t you just cut the county budget?” Babb says. “Well, the commissioners could. There’s nothing that says Whitfield County has to have a recreation department, so we could cut $880,000 right there. But recreation is a quality of life issue and is also reviewed when businesses come to evaluate Whitfield County. The county in the past ran the fire department with all volunteers. We could go back to all volunteers but we would see the insurance costs rise in the county and we would see a drop in the response time to fire, medical emergencies, and auto accidents. Economic development would be hurt by the reaction of businesses, existing and prospective, to the higher insurance and slower response times. The commissioners could ask the sheriff to cut out his patrol units but what happens to safety concerns and response times outside the city of Dalton? The commissioners’ job is to control the budget but also to ensure a quality of life that is desirable in our community.” Babb says the commissioners are proud to fund a county government that provides these and other services that make a difference in the quality of life – all at the eighth-lowest millage rate in the state. “We feel like we have the budget set at a point that further cuts will begin to negatively affect the level of service to our residents,” he said. “Now our choice is to institute special tax districts to fund these services or to eliminate the services. For the owner of a $100,000 home in unincorporated Whitfield County, that will mean an extra $40 after we approved 2.0 mills for the special districts.” So what does all this mean to the owner of a home valued at $100,000 in 2013? Average tax bill for property owner on a home in unincorporated Whitfield County valued at $100,000 in 2013 before special tax: $100,000 x 40% = $40,000 - $20,000 (homestead exemption) = $20,000 taxable value. Sample 2013 tax bill: $20,000 x 6.061 mills = $121.22 Same home valued at $100,000 in 2013, including special tax districts: $100,000 x 40% = $40,000 - $20,000 (homestead exemption) = $20,000 taxable value Sample 2013 tax bill: $20,000 x 6.061 mills = $121.22 + special tax $20,000 x 2 mills = $40. Total bill with special tax districts: $161.22
Posted on: Mon, 30 Sep 2013 14:55:32 +0000
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