Proposed tax hike has commissioners on the alert

The warning signs were there before now that a property tax increase could be needed to shore up the Macon-Bibb County budget, mainly because of a sharply declining reserve balance as revenues decreased.

But now, after Mayor Robert Reichert’s recommendation of a 3 mill tax increase for the upcoming budget, commissioners must decide if raising taxes is necessary.

Was there an overly optimistic outlook that led to budget projections being off in the last couple years, culminating in the first proposed tax increase since the consolidated government started in 2014?

Five years ago, property owners in unincorporated Bibb County faced a similar increase, as the millage rate went from 12.152 mills to the current rate of 14.652.

Since then, Macon and Bibb consolidated and general fund revenues have dropped by millions, much of it due to the elimination of double taxation of former city residents. Deficits had to be covered by dipping into reserves — including $8 million in fiscal 2016.

The reserve balance, sometimes referred to as the “rainy day fund,” now stands at $17 million, about half what it was just four years ago.

There may have been some unrealistic budget projections, but Commissioner Mallory Jones said he doesn’t blame the budget team for that. A declining population, meaning a lower tax base, and uncertainty in a new form of government led to some of the budget problems facing the county, he said.

But if he’s going to get behind any tax increase, he said, the value must be evident to the residents.

“I had people tell me months ago: ‘Listen, there’s going to be a revolt. They’re going to be livid,’ ” he said about the prospects of a tax hike. “We have cut and cut and cut, and revenues aren’t where we want them to be. My position is if we can show value, then I can support it.”

There are different departments, such as Parks and Beautification and Public Works, that have felt the brunt of fewer employees. In 2013 there were 125 Public Works employees between the city of Macon and Bibb County. That number is now about 65, Jones said.

“We have good people, we have some great directors, but we’re pushing those folks to the limit,” he said. “We have to rehire people if I’m going to support this. We need to provide them with the tools they need to provide great public services.”

Why 3 mills?

So how did the administration settle on a proposed 3 mill increase, which would generate about $11.7 million in revenue?

Mayor Robert Reichert said during his budget presentation that 2 mills would help the county recover from the budget shortfall.

The other 1 mill would cover additional costs associated with expanded recreation centers, a new south Bibb facility and new fire stations built with special purpose sales tax proceeds.

There’s also more money allocated to the Bibb County Sheriff’s Office.

Budgets for the majority of Macon-Bibb departments are in line with the previous year, with either slight upticks or declines. There’s also a $1.6 million increase in contributions to pension plans.

A 3-mill increase would mean about $99 more a year for property valued at $100,000.

One of the difficulties in putting together budgets in a newly consolidated government has been the unpredictability of revenue, Macon-Bibb County spokesman Chris Floore said.

“When governments build their budgets, they have years of data on how much each revenue stream typically brings in,” he said in an email. “As a consolidated government that is both a city and county, there were a lot of variables that impacted our budget projects.”

Major changes in taxes and fees include an insurance premium tax that’s doubled to about $9 million since 2012. Sales tax revenue has dipped from $34.6 million in 2012 to $29.5 million in 2016, and the impact of a change in how motor vehicle taxes are collected was unknown for a while, Floore said.

“The 3 mill increase would provide the revenue needed to not dip further into our fund balance while covering much-needed additional expenses, like the pay for public safety and additional staffing in the Fire and Recreation departments,” Floore said. “However, this budget in no way pays for everything our departments, agencies, and courts have said they need to provide full service to the public.”

Next steps

Since Reichert’s budget presentation Tuesday, commissioners have been combing through each of the line items in the budget to see if there is any room to scrape away money.

Commissioners will be able to ask questions of the budget team at a called meeting of the Operations and Finance Committee on Tuesday. It kicks off what is expected to be a busy May and June, as officials delve deeply into the new budget, since the new fiscal year starts July 1.

The proposed millage rate increase has generated some negative response, Commissioner Gary Bechtel said.

“To some degree people are questioning it, but I think the ones that are cognizant of what we’ve had to do over last three budgets understand our revenues are down so we have to make adjustments,” he said. “People aren’t pleased. But we have to look at this to see if there are ways to make other cuts, adjustments or changes.”

The county’s revenues have dropped by about $21 million since fiscal 2014, when $160 million was generated in various taxes and fees.

For the last couple of years there was enough money in reserve to “weather the storm,” but now it’s caught up with the county, Commissioner Virgil Watkins said.

“We went bare bones,” he said. “Services have taken a hit, morale has taken a hit in general. It’s not a maintainable pace with the amount of services our citizen require and expect.

“We also have an obligation from a financial standpoint to maintain our reserves, to be good stewards of our finances. We realize we’re getting dangerously close to not being there.”

To view the proposed fiscal 2018 budget visit www.maconbibb.us/tag/budget.

This story was originally published May 12, 2017 at 5:32 PM with the headline "Proposed tax hike has commissioners on the alert."