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BOE millage rollback offsets county's lack of one
Inflation in assessed values drives property tax decisions
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The Bulloch County Board of Education last week voted to roll back its millage rate a fraction to offset inflation in property values and avoid having to announce a tax increase.

But the school board's marginal rollback is being offset by the county commissioners' pending decision not to roll back their millage for the property tax that funds the county government. The commissioners scheduled two of their three required tax increase hearings for this Tuesday at 8:30 a.m. and 6:30 p.m. The commissioners did not actually increase their millage, keeping it at 12.34 mills, the same as in 2015 and 2016, but inflation in appraised values, along with gains from new construction, will give the county government 3.16 percent more property tax revenue than last year.

Under a 1999 state law called the Georgia Taxpayer Bill of Rights, local governments that take advantage of inflationary growth in values must announce a tax increase. So, the commissioners' notices show an increase from 12.191 mills, which would have been the rollback rate they needed to avoid tax increase hearings.

Meanwhile, the Board of Education adopted a 9.685-mill rate, a rollback from the 2016 school-tax rate of 9.804 mills. A mill is one-thousandth of the value of property as assessed for taxes.

"This is not something the Board of Education calculates, a rollback millage rate," said school system Chief Financial Officer Troy Brown. "Our assessors' office, through a formula given from the state, calculates what the rollback millage rate may need to be for our county."

With the rollback, the school system is giving up about $217,000 in potential revenue, Brown advised the Board of Education last Thursday.


Real revenue up

However, the board's Aug. 2 published notice of its tax levy for the past five years and this year projected that the school system should still receive 2.11 percent more property tax money than last year. The 2016 gross school tax revenue was a little over $17.3 million. The 2017 revenue, at the 9.685-mill rollback rate, is projected at $17.67 million.

After paying the county's collection fee, the schools will keep a little over $17.2 million.

The total is increasing because the school system will still receive revenue from property taxes on new construction and improvements, which the law does not require be rolled back.

For typical homeowners, neither the county government's default increase nor the school board's rollback will have a big effect. For a home with a steady market value of $125,000, assessed at 40 percent of that for taxes, the commissioner's "tax increase" would cost $7.45, offset by a $5.95 rollback in school tax. But actual increases vary with appraised values.

This is not the first time the school board and county commissioners have taken opposite approaches to a potential rollback.

The school system has major revenue sources not available to the county, including state funding to schools and Local Option Sales Tax revenue. Bulloch is one of about 10 counties in Georgia where revenue from the regular 1 percent local sales tax goes to the operating budget of the school system instead of the county government.

"We've often talked about the benefit of Bulloch County having what we call a mixed revenue portfolio with sales tax dollars and the property tax dollars because it gives you a safety net," Superintendent of Schools Charles Wilson told school board members Thursday night.


ESPLOST a factor

Additionally, the Board of Education has proposed continuing its other 1 percent sales tax, the Education Special Purpose Local Option Sales Tax, for five years and will need the approval of voters in a Nov. 7 referendum. Unless an extension is approved, the ESPLOST would expire Dec. 31, 2018.

In previous five-year installments, the special sales tax has been used mainly for building new schools and renovating existing ones.

But this time, school system administrators have recommended using a large portion of the ESPLOST for annual capital expenses, potentially reducing the demand for property tax revenue. Classroom technology, school buses and textbooks are expenditures suggested for a shift to ESPLOST.

School system officials figured that not rolling back the millage could hurt the ESPLOST's referendum's chances, Brown indicated in a memo to Wilson, which was provided to board members.

"We will be foregoing approximately $217,000 in revenue, but as you and I discussed, the possible fallout that this could cause to the upcoming ESPLOST referendum would be far more detrimental than foregoing the $217,000," Brown wrote.


New property values

Reappraisals were widespread, and increases last year and this follow three years when the Board of Assessors lowered values, in 2012, 2013 and 2014, followed by 2015 when they remained unchanged, said Bulloch County Chief Appraiser John Scott.

"Pretty much all the residential and commercial saw some changes this year, and it's just in response to the market that we're all, hopefully, glad to see ticking upward after several years of ticking downward," he said.

The volume of building permits has increased as well. Of a $44.8 million increase in the value of the real estate in the tax digest, about $22 million was from reassessments and the rest from growth, he said. The taxable real and personal property in Bulloch County is now valued at $1.95 billion.

The county government is now in the third year of a five-year plan since its last millage rate increase, targeted to adding public safety personnel and restoring a depleted fund balance, said County Manager Tom Couch.

"If the inflation continues to occur and our fund balance improves at an accelerated rate, we may be in a better position to do a rollback," he said. "For now, we must stay disciplined."


Herald reporter Al Hackle may be reached at (912) 489-9458.

 

 

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