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Property tax roll-up is on the table
Finance chief: City may need to adjust millage rate to keep revenues steady, finance chief says
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Gainesville officials facing uncertainty on property assessments inside the city limits may have to consider increasing the tax rate on property owners next year.

In a daylong retreat to discuss upcoming issues for the city this year, council members heard Friday morning from the chief financial officer, who strongly encouraged them to consider a roll-up in the millage rate.

Later in the day, the head of the city's parks department also requested that the council consider a higher millage rate.

One mill equals $1 for each $1,000 in assessed property value.

State law does not consider a roll-up in tax rates as a bona fide tax increase because it is meant to keep tax revenues at the same level for government in the face of shrinking property values.

Council members have yet to begin seriously considering if they would support such an increase, but Melody Marlowe, head of the finance department, said something must be done this year.

It's likely the city could see about an 11 percent drop in its tax digest this year on top of an 8 percent loss last year.

Hall County's Chief Tax Appraiser Steve Watson, addressing local government representatives Wednesday night on the Georgia Mountains Regional Commission, said more properties in the city limits likely will face reassessment this year, which will no doubt result in lower values due to years of foreclosures and bank sales.

Those lowered values will result in less tax revenue for next year's budget.

City officials won't see the specific numbers until May when the tax assessor's office sends them the digest.

The city uses the revenues from property taxes to fund day-to-day operations. It also uses a portion of the tax to fund the parks department and to pay off debt.

And though the city's tax digest is dropping, its debt obligations haven't changed.

Gainesville still is paying off a new public safety facility and fire station. The loans taken out on the project were supposed to be repaid with Special Purpose Local Option Sales Tax revenue. But as those collections come in lower than projected, city officials will need to look for other ways to pay their debts, Marlowe said.

City officials are also gradually taking on the full cost of some 21 firefighters they hired with a federal grant, and had already planned a property tax increase in 2015 to help pay for it.

But that tax increase was planned when the city expected the tax base would grow by now, not shrink, Councilman Bob Hamrick said.

City staff, in response to a question from Mayor Danny Dunagan, said that to continue meeting those obligations, the council might have to raise the tax rate to keep property tax revenue at the same level.

Council members were wary of the idea Friday. Dunagan said he wanted to exhaust all other options before considering raising taxes. Councilman George Wangemann, too, said he was unsure whether he wanted to raise tax rates for property owners already struggling.

But it will be awhile before they have to decide. Council members likely won't have all the information they need until summer.

Until the digest comes in this May, the city's finances seem stable for now.

Marlowe's report to the council Friday included a few bright spots, including a projection that revenues likely will come in about $1 million above the $25.2 million council members budgeted last summer.

At the same time, expenditures are projected to be about half a million less than originally predicted.

 

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