Statesboro’s mayor and two council members heard from a total of four citizens during the city’s noon property tax increase hearing Tuesday, Sept. 12. Three of the same four citizens spoke against the increase again during the 6 p.m. hearing, and that was all.

The city has one more tax hearing scheduled, for 5:30 p.m. Tuesday, Sept. 19, coinciding with the regular City Council meeting. During that meeting, the council could vote to adopt the new, proposed property tax rate of 9.212 mills, up from the 7.308-mill rate the city maintained for the past five years. If adopted, the 9.212-mill rate will be the city’s highest in 30 years.

The proposed 1.9-mill addition amounts to a 26% increase in the millage rate itself. But when added to the 2022-2023 inflation in the assessed value of taxable property in the city limits, the millage boost is expected to result in a 44.75% increase, on average, in the tax on homes and businesses.

On a house previously valued at $200,000, the city tax would rise from $496.24 to $718.54, a $222.30 increase, by the city staff’s calculations.

The 44.75% number, reflecting the 2.85-mill difference between a “rollback rate” of 6.362 mills and the proposed 9.212 mills, was the total increase cited in notices the city published in the newspaper. The rollback rate, as City Manager Charles Penny explained during the hearings, is the lower rate the city would have to adopt to keep the tax “revenue neutral,” collecting roughly the same amount as before inflation.

That the city is dealing with inflation in personnel costs and preparing for population growth was the main thrust of his argument as he opened each hearing with a more than 20-minute presentation about city officials’ reasons for seeking the increase.

Those who spoke

The first of the four citizens to speak at the noon hearing was Cassandra Mikell, who is not a Statesboro resident but owns property in the city limits.

“All of this is a broken process where the city’s budget was passed months ago and implemented before the funding was to be voted on. … ,”  Mikell said to the city’s elected officials. “Just say ‘no’ to the millage rate increase, go back to the budget and make cuts to anything unnecessary.”

Lawton Sack, chair of the Bulloch County Republican Party, was the second speaker. He is a resident of Statesboro and now a candidate for the District 2 seat on City Council, which is nonpartisan.

“Bryan County just lowered theirs (millage rate) for the seventh straight year, and there is something they are doing right that Bulloch County and the city of Statesboro and the Board  of Education is evidently not paying attention to. …,” he said.

His mother, Jane Sack, who said she is a resident of the county but recently sold some property in the city, told the council she was speaking on behalf of senior citizens others who will have difficulty paying higher taxes. She and her son and Mikell had also spoken at Bulloch County Board of Commissioners and Board of Education hearings opposing their tax hikes.

Leonard Fatica, who is the Bulloch County Democratic Committee chair and not a Statesboro resident, was the fourth midday speaker. He said he applauds the city for going after state and federal dollars to help with its budget.

“The question that I think we’re all missing is why do we have to do this at the local level and not at the state level where Governor Kemp and our elected officials are sitting on $10 billion reserves,” Fatica said.

‘Human capital’ costs

Penny had begun his argument for the millage increase by noting that the city does not produce a product but provides services through the work of its employees.

“So without that human capital, we really can’t provide the services that our citizens have become used to, so in order to do that we have to make sure that we can continue to pay our employees,” he said.

The city’s fiscal year 2024 budget – approved by the council in June and in effect since July 1 – includes a 5% “pay plan adjustment.” That’s an across-the-board raise for the city government’s 330 employees.

Additionally, the city is in the third year of funding pay-for-performance program. After an annual evaluation, employees receive raises ranging from zero to 4%, in addition to any across-the board raise. Penny noted that national inflation rates were about 7% in 2021 and 6.5% in 2022. His slide showed 3% inflation for this year.

“In 2023 we did see inflation come down. However, it takes a while to actually catch up to inflation that people are still experiencing,” he said.

Costs of growth

Statesboro also has to position itself for growth occurring in the region, Penny said. He noted not only the Hyundai Motor Group plant being built in northern Bryan County and expected to eventually employ about 8,500 people, but also that three Hyundai suppliers are building or plan to build factories in Bulloch County, together employing about 1,400 people.

“With Hyundai coming, with the suppliers coming, we’re all going to be faced with the opportunity that our employees have other choices,” Penny said, “and if we don’t keep our pay plan up to date, we will be losing our employees to these other opportunities.”

The city has contracted the human resources consulting firm Condrey & Associates to complete a study for a new pay plan to be implemented next fiscal year, beginning July 1, 2024.

Statesboro’s total city expenses are budgeted at almost $91.4 million for the current fiscal year, up 24.8% from the past year’s $73.25 million. That includes budgets for services such as water and sewer, natural gas and stormwater that have their own fees, and the special-purpose sales tax and grant funds, as well as the general fund.

The general fund, the one that receives property tax revenue, is budgeted at $22.29 million in spending, an 8.2% increase from the last year’s $20.6 million.

At the proposed new millage, property taxes are expected to net $8,965,000 for the city, or about $2,773,000 more than the $6,192,000 that would have been expected from the rollback rate.

Meanwhile, spending increases include $1.2 million more for salaries and benefits, $50,000 to employ a small-business recruiter, $50,000 for debt costs, $77,000 for contracted street labor, $60,000 contracted labor for parks, $55,000 for the compensation study and $30,000 for tools for the Police Department.

The city could balance its budget without a millage rate increase, but doing so, Penny said, would require using $2.14 million of accumulated fund balance. That would further erode the balance, which he said is needed as an “emergency fund.”

The previous year, he said, the city spent down the balance by $600,000.

The 2023 general fund balance, as of June 30 and unaudited at this point, was roughly $7.2 million, said city Finance Director Cindy West.

One year earlier, June 30, 2022, the balance had been $7.94 million, according to the city’s F.Y. 2022 comprehensive financial report. That had been a $603,490 reduction since June 2021.

This year’s proposed increase should fully restore the balance and cover cost increases resulting from the new pay plan without a further rate increase next year, Penny said.

Mayor Jonathan McCollar and council members Paulette Chavers of District 2 and Shari Barr of District 5 were the three elected officials who attended each of Tuesday’s hearings. District 4 member John Riggs had planned to attend but was ill, McCollar said.