Wednesday, August 11, 2010

“County property tax hike likely” plus 2 more

“County property tax hike likely” plus 2 more

County property tax hike likely

Posted: 11 Aug 2010 08:45 AM PDT

The Dyer County Commission must raise the county property tax rate by 17 cents to pay for two new schools.

County Trustee Judy Patton was reluctant to announce the news to the commission's budget and finance committees on Tuesday. She was surprised by the amount needed - and so were the commissioners.

County commissioners understood they'd have to raise the property tax to repay federal loans for the schools, but they were expecting something more like 6 or 7 cents, Budget Committee Chairman David Agee said.

Patton said revenues have declined, payments in lieu of taxes have dropped and interest the county earns on its investments has dwindled. "Everything is down this year," she told commissioners.

The budget and finance committees met together during the fifth hearing on the county's 2010-11 budget proposal. The group reviewed the Debt Service budget and continued its discussion on the fate of the proceeds from the 1984 sale of Parkview Hospital.

The Debt Service budget includes $2,435,853 in revenues, $2,531,739 in expenses and uses $95,886 from the fund balance to balance the budget.

The fund balance is estimated to drop from $3,870,168 on July 1 to $3,774,282 on June 30. Without an infusion of funds, Patton predicted the fund balance will fall to $474,720 within two years.

More alarming, County Mayor Richard Hill said, is the effect a declining Debt Service fund balance will have on the county's General Fund. The county gets most of its revenues from property taxes, and most property taxes aren't paid until six or seven months into the fiscal year. The county General Fund often borrows money from the Debt Service fund balance for cash flow until property taxes are paid.

"Folks, this debt service is serious," Hill said. "This is an avenue of paying bills but it is also an avenue of covering any emergencies that arise."

Nancy Broadstone, director of finance and budgets, said the county's fund balance usually fares better than predicted. In five of the last six years, the fund balance was at least $458,000 better than expected. She credited conservative spending by county officials.

If the county property tax rate were raised from $2.35 to $2.52 for every $100 of assessed property value, the Debt Service Fund would be solvent until 2022 or 2023 - even with two new schools, Patton said.

Committee members also briefly discussed raising the wheel tax in combination with a property tax increase. Hill said the county's wheel tax - at $60 - is about the highest in the area. All funds from the wheel tax are earmarked for education.

While a 17-cent increase on the tax rate sounds like a lot, county commissioners suggested it sounds worse than it is.

For example, a home appraised at $100,000 would have an assessed value of $25,000. The property taxes currently cost $588; the new rate would be $630. That a $42 increase, or $3.50 a month.

Taxes on a $150,000 home are currently $881. With a 17-cent increase on the tax rate, the taxes would be $945, or $64 more. That's an additional $5.33 a month.

The increase is needed to begin repaying two loans the Dyer County school system is receiving through the American Recovery and Reinvestment Act and the Tennessee Qualified School Construction Bond program.

The school board received an $8.881 million loan last year to build a new school for Fifth Consolidated School and learned last week that it would receive an additional $5.734 million to replace a portion of Newbern Elementary School.

Finance Committee member John Flatt said the schools are definitely needed. The federal loan program provided an opportunity to build the schools at a fraction of the cost, since the county won't have to share these school construction funds with the Dyersburg city school system.

The 17-cent property tax increase may cover the new schools, but it won't address the $634,317 deficit in the General Fund budget proposal. The General Fund includes most county services, including law enforcement, county fire protection, courts and county offices.

"All the money's been asked for. I think we're going to have to tell them 'no,'" Agee said. "And, we need to find some places to cut."

Hill told the commissioners that 80 percent of the county's expenditures are in personnel. He said the county can't cut a lot of funds without laying off employees, and the county can't force office holders to lay off anyone. The office holders can go to court and get the positions restored, he said.

But, Flatt said, if business in the county offices is down, the number of employees needed would be lower, too. He noted that the county is collecting fewer fees for services performed, such as writing building permits.

The budget committee was to continue its review of budget proposals at 9:30 this morning. The county school system is expected to present its budgets.

In other business, the two committees voted to dissolve a "special fund" established when the county sold Parkview Hospital to Methodist Health Systems in the 1980s. The funds - nearly $18.5 million - will be placed in the county's General Fund.

Concerned that the funds will appear too accessible in the General Fund, the committees plan to recommend that the full commission adopt a resolution requiring the support of three-fourths of the commission to spend the funds.

County Attorney Mike Gauldin said the resolution may be repealed with a simple majority vote. Agee said the commission could treat the resolution as one of its unwritten rules.

New federal budget regulations from the Government Accounting Standards Board require the county to incorporate the proceeds from the hospital sale into the General Fund. Failure to do so could damage the county's ability to borrow money.

The $18.5 million is currently invested and the county uses the interest generated to help pay off debts. The investment has provided more than $20 million in interest through the years, Hill said.

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Thomson Reuters Updates Property Tax Software

Posted: 11 Aug 2010 12:00 PM PDT

The Tax & Accounting business of Thomson Reuters has released the latest version of ONESOURCE Property Tax, which now uses a completely browser-based interface.

Version 9.3 of the software helps property tax professionals manage both real and personal property tax compliance responsibilities.

Feature include new location subject extends functionality and makes Asset Manager easier to use, the ability to manually add assets in the Asset Detail screen, the ability to nationally classify assets one time for all states, the ability to 'click and drag' location moves, a feature that lets users import and manage the chart of accounts function, new "in-grid" quick search and select options, the ability to view and compare depreciation overrides, automated tax recovery computations, and parcel subject field enhancements, including net operating income, cap rate and scheduled closing fields.

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For more information, visit http://onesource.thomsonreuters.com/propertytax.

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Barrow commissioners approve property tax hike

Posted: 11 Aug 2010 01:07 PM PDT

WINDER - Barrow County Commissioners approved a property tax hike Tuesday.

The proposed 2011 budget requires commissioners to raise the county's property tax millage rate by a mill to compensate for lost revenue.

The Athens Banner Herald reports that property tax revenue was projected to shrink by $1.5 million next year because of declining property values. The 1-mill increase will allow commissioners to bring in about $31.45 million in property tax revenue, slightly less than they plan to collect this year.

The proposed spending plan will not be adopted until after several public hearings. The budget caps county spending at $31.4 million, significantly less than previous years.

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