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Three prominent retailers ask city to avoid millage rate hike
Officials say added revenue needed to protect fund balance but note increase isn’t set yet
Anthony Waters of L.A. Waters Furniture speaks to Statesboro City Council. He was followed Tuesday by Mike Anderson and R.J. Pope in urging the council to find alternatives to a millage rate increase.
Anthony Waters of L.A. Waters Furniture speaks to Statesboro City Council. He was followed Tuesday by Mike Anderson and R.J. Pope in urging the council to find alternatives to a millage rate increase. - photo by AL HACKLE/Staff

Four men, including three owners of some of Statesboro’s longest-established independent retail businesses, spoke to the mayor and City Council during their budget hearing Tuesday and asked that they consider other revenue sources than increasing the property tax millage rate.

As Mayor Jonathan McCollar and City Manager Charles Penny noted, the hearing during Tuesday’s regular council session was not a tax-increase hearing as such. Unless the city officials abandon the rate increase and instead adopt a lower “rollback” rate to offset this year’s inflation in assessed property values, state law requires holding three tax increase hearings later before the millage is formally set, but that will probably be in September.

Tuesday’s was instead a public input hearing on the proposed city budget for fiscal year 2023, which begins this July 1. But that budget, slated for adoption by the council June 21, currently has built into it a 1.5-mill increase in the city property tax rate. It would be a 20.5% increase in the current rate of 7.308 mills, and compounded by the more than 7% increase in the value of taxable property as determined by county tax appraisers, would boost the city’s property tax revenue by about 30%.

When McCollar opened the hearing for public comments, Anthony Waters, co-owner of L.A. Waters Furniture, which also operates the I Save More Furniture & Mattress store, was the first to speak in opposition to the millage increase. He noted that retailers such as furniture dealers pay property taxes not only on buildings but also on their inventories. Retailers also pay through the city’s occupational tax and work with the city, county and state to collect sales taxes, he said.

“I think it’s important for you to consider the impact that raising these taxes has on your retailers,” Waters said. “We’re also looking, if you notice around town you’re seeing buildings go dark. This is not a good sign for the city, and you know, you say, well, this tax increase doesn’t have anything to do with it. Well, it does.  It will.  The difference in a retailer making a profit and not making a profit is not a great, big amount.”

He asked that the council “be thoughtful” and consider whether there may be “a broader base of ways to raise taxes rather than property taxes.”

Mike Anderson, co-owner of Bulloch Fertilizer as well as of Anderson’s General Store, said that retailers face “a lot of challenges.”

“We can’t simply raise our prices to cover things like this because we have competition, and of course the big competition for us retailers now is online sales, and those guys aren’t paying a lot of property taxes. I don’t see any Amazon buildings in Statesboro,” Anderson said. “So, we are limited in how we can pass expenses along.

“But not only the retailers and business people in the city, you know your citizens are also experiencing inflation in the food that they’re buying and the gas that they burn going back and too to work … so we all are feeling the impact,” Anderson continued.

He also suggested looking for other revenue sources or “ways to trim down what we’re spending.”

McCollar then commented before calling for the next speaker.

“Just for a point of clarity, this discussion in regard to property tax will go on through September, and so that decision won’t be made today, and we are being creative as we’re looking at what sources,” the mayor said. “So we do want to communicate with the public … and we continue to want your input.”

Third up was Ronnie J.  Pope, who with his sons owns R.J. Pope Traditional Menswear and R.J.  Pope Men and Ladies Apparel.

“I’m here to say, fund our police, fund our fire department, fund our frontline people, but there’s got to  be some other ways,  we’ve  got to figure out, to fund, to get more money in the coffers for the city to operate, than just property taxes,” Pope said.

The fourth speaker, retiree Carlton Crenshaw, said he wanted to speak “to represent the people who have trouble coming and representing themselves” and also asked the city officials to consider alternatives.

 

Budget summary

Before the public input, Penny gave a summary of the budget situation.

The total of the city’s budgets for all funds is shown as $87.2 million. But that includes fee-supported budgets such as those of the water and sewer, natural gas and waste collection, plus capital projects budgets funded from special sales taxes, and even transfers between funds that result in some dollars being counted twice, as well as the general fund itself.

The general fund, the part that includes tax revenues, totaled a little over $18.1 million for the fiscal year now ending and is projected at $20.6 million in the proposed fiscal 2023 budget, a 13.8% total increase.

“This budget is set in order to be able to provide the same level of services that continue on an annual basis,” Penny said. “It is also designed to take care of our employees. It is also designed to try to keep pace with the rising inflation rate.”

The proposed budget contains a 4% across-the-board raise for city employees plus pay-for-performance raises first authorized last year and an increase in the annual bonus from $100 to $500.

These account for about $1,384,600 of the projected new spending across the city’s budget funds, according to estimates provided by city Finance Director Cindy West. That includes $710,800 for the 4% raise, $533,000 for pay for performance raises, and $140,800 for the boost in bonuses.

More than 57% of those costs, or almost $800,000, will be in the tax-supplied general fund, according to West’s estimates.

Regular property tax revenues, budgeted at $5.2 million for fiscal year 2022, are shown increasing by more than $1.6 million, to $6,824,285. The total projected increase is the general fund spending is about $2.5 million.

Within that, proposed budget also adds two authorized police officer positions, and Penny is allowing Police Chief Mike Broadhead to “over hire” for four more officers if all positions are filled. Adding officers also entails buying patrol vehicles and other equipment.

Eight additional dispatchers, authorized in the middle of the current fiscal year to be shared by the fire and police departments, are funded for a full year in the new budget.

 

Almost 50% reserve

A draft of the budget presented in early May was balanced with no millage rate increase, but that was done by projecting a more than $2 million reduction in the general fund’s year-end balance, Penny noted again. With the suggested 1.5-mill tax rate increase, the projected reduction in fund balance – which Penny compared to a savings account or rainy-day fund – would be limited to roughly $1 million.

The city has now accumulated a general fund balance of about $9 million. Once, it was as low as $99,000. That was back at the end of fiscal year 2010.

“The fund balance is really critical, and I simply say, in the history of this city there has been a period of time when fund balance in the general fund was incredibly low, and it was nerve-wracking for the board but also for the staff,” Penny said. “So, by policy, we set that fund balance at about 25% of that fund. …

“We are blessed to have been able to build that fund balance to a higher number of about 49 to 50 percent,” he continued.  “However, even at $9 million it’s not a lot of money, if we had a major disaster that were to hit us.”

McCollar again related protecting the fund balance should to the severe damage caused in Pembroke by the April 5 tornado. He noted that the Federal Emergency Management Agency was not helping with the recovery there. 

“Right now we have a fund balance that if we’re hit with a hurricane, if we’re hit with a tornado, we have the capability to move forward,” McCollar said. “It’s kind of like your emergency savings at home. If something bad happens, you have funding there to take care of those bad situations.”

 

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