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City won’t raise tax rates or fees, but property tax rises with inflation
Proposed budget includes 4% raise for city employees
Statesboro City Manager Charles Penny presents the proposed fiscal year 2023 budget with a slideshow during Tuesday's 3 p.m. work session with the mayor and council members.
Statesboro City Manager Charles Penny presents the proposed fiscal year 2023 budget with a slideshow during Tuesday's 3 p.m. work session with the mayor and council members. - photo by AL HACKLE/Staff

Statesboro’s city staff is proposing a fiscal year 2023 budget that calls for no increases in city tax rates or fees.  However, it takes advantage of estimated 7% growth in property tax revenue and is projected to draw down more than $2 million from the city’s accumulated fund balance.

“I am proud to be able to say to you that we are presenting a balanced budget with no fee or no rate increases,” City Manager Charles Penny told Mayor Jonathan McCollar and City Council members.

That was at the start of Penny’s presentation during their Tuesday budget work session. Fiscal year years are named for the calendar year in which they end, and city, county and state fiscal 2023 begins this July 1. A public hearing on the budget is slated for June 7, when the council will have a 9 a.m. regular meeting, and a council vote to adopt it is targeted for June 21.

The city’s general fund for current fiscal year 2022 covers $18.14 million in appropriations, and the projected general fund total for fiscal 2023 is $20.48 million, an increase of 12.9%. The general fund is the portion of the budget that receives property tax revenue.

But Statesboro’s overall city budget is much larger. In addition to the general fund and a separate fire service fund, it includes special funds such as those for the Special Purpose Local Option Sales Tax, or SPLOST, and the sales tax for transportation, or T-SPLOST, and enterprise funds with their own fees, such as water and sewer, natural gas, storm water and solid waste collection.

The combined budget for all funds – minus transfers between departments – totals $63.16 million in the current fiscal year and is proposed at $73.34 million for next year, a projected 16.1% overall increase.

 

Raise and hires

Among the proposed new spending is a 4% “pay plan adjustment,” or general increase for city employees, in addition to any individual raises for job performance.

“Last year we did a 3 percent. Our pay plan had fallen behind,” Penny said. “Now this year what we’re going to be recommending is a 4 percent pay adjustment for all city employees, and inflation is an 8½ percent … and we could never keep up exactly with inflation.”

He also proposes increasing a $100 annual holiday bonus to $500 and adding a Good Friday holiday.

In combination with the raises and bonus increase, the proposed hiring of several additional employees, and the previous addition of some positions for which a full 12 months’ costs will be seen for the first time in fiscal 2023, account for much of the new spending.

Penny proposes hiring a business recruiter at a projected cost of $75,000 and supplying $50,000 toward the employment of an events manager.

The Statesboro Police Department will not, in this proposed budget, be authorized to add 14 officer positions as it requested. But the department does not have all positions filled within the currently authorized number.

In this budget, Penny proposes adding two police officers, plus the cars and equipment they require, and said he is authorizing Police Chief Mike Broadhead to “over hire” by four additional officers if he first obtains the currently authorized force. So, he could add up to six more officers.

The city is continuing to budget costs for nine additional firefighters the council authorized for the Statesboro Fire Department one year ago. No more new locally funded firefighters are included in the proposed budget, but Penny said the city will again apply for a federal SAFER grant to add 12 firefighters.

The proposed budget also includes the first full year of projected costs for eight additional dispatchers that were authorized in the middle of the current fiscal year. This was done to transfer responsibility for detailed dispatching of Statesboro firefighters, after the initial callout, from the Bulloch County 911 Center to the Statesboro Police Department’s in-house dispatching center.

Four of the new dispatchers are budgeted through the city’s general fund; the other four, from the fire service fund.

 

Revenue trends

On the revenue side, Penny and staff project an 8.6% increase in income to the general fund, including the 7% growth in the value of the property tax digest. That tentative projection, supplied by Chief Appraiser John Scott of the Bulloch County Tax Assessors’ Office, includes growth from any new construction or building improvements in the city, as well as inflation in the value of existing properties.

Again, Penny is not proposing any increase in the city’s millage rate. But property taxes also rise with inflation in property values, and under a Georgia law known as the Property Taxpayer’s Bill of Rights, the city must either roll back its millage to compensate for inflation in existing property values or announce a tax increase and hold three hearings.

Penny isn’t proposing any rollback either, he confirmed in an email Wednesday.

A rollback or hearings are not required for gains from construction and development, only for inflation. Scott does not have a breakdown of those categories yet, he said in a phone interview Wednesday, but he said his goal is to have it in the next week to 10 days. This is data is required by the county commissioners and school board, as well as the city, as all have separate rollback rates to be determined.

But he confirmed that inflation will account for a majority of the city’s digest growth. Home sales prices have been soaring.

“The majority of that would be inflationary growth,” Scott said. “Frankly, this housing market – this is my 39th year in property tax assessment, and I wasn’t here after World War II or the Civil War or World War I – but in my 39 years it’s certainly unprecedented what’s happened in the last year to 18 months.”

 

Spending its balance

Even with the growth, the city’s proposed spending exceeds projected new revenue for fiscal 2023 by more than $2 million in the general fund and more than $300,000 in the fire service fund.

A request by the city to have the Bulloch County Board of Commissioners increase the special county millage in the district served by the Statesboro Fire Department outside the city limits will be explored in a separate story.

From the end of fiscal 2020 to the end of fiscal 2021, the city increased its overall fund balances by almost $5 million, to $28.9 million. Fiscal 2021 was when the city received previously unexpected federal funding under the Coronavirus Aid, Relief, and Economic Security, or CARES, Act. The general fund balance alone grew $1.4 million, from $7.1 million to $8.5 million, as seen in Penny’s budget slideshow.

Another slide compared Statesboro’s current 7.308 mill city property tax rate to those of 20 other nearby or similar-size Georgia cities, showing Statesboro’s among the lower half.

Penny cautioned the mayor and council that they cannot rely for long on spending from an accumulated balance.

“We used $2,062,653 of the fund balance just to balance the general fund budget,” he said. “Now, we’ve seen the growth in the fund balance, so we can recommend it to you, but I also need to just say to you, using this amount of money, it’s not sustainable. You can do it one year, and then after that we’ve got to have revenue from somewhere.”

 

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