September 19, 2013
taxes going up
After five years of no salary increases, the Marshall County Board of Supervisors gave all county employees a salary increase of 3 percent. The board also raised the tax levy from 112.7 mils to 117.95 mils, an increase of 5.25 mils.
The board of supervisors adopted a $21,684,023 budget. Last year’s budget was $20,774,039.
The ad valorem tax raises about 70 percent of the revenue for the budget, while the other 30 percent in revenue is raised by fees, fees in lieu of taxes, and a variety of other means.
Supervisors said they have cut back department budgets by 6.3 percent over the last few years and this new budget is a bare-bones budget.
The budget increase of about $900,000 for FY 2014 included about $268,000 to cover the 3 percent raises for employees; $50,000 for a summer youth work program; some money for fire departments; $30,000 for a tuition guarantee program for junior colleges; and $175,000 additional monies for Northwest Community College, according to the business office.
The increase in ad valorem tax would increase the real property tax on a $150,000 house by $72 dollars a year.
A number of businessmen spoke at the public hearing before the budget was adopted.
Kelly Jordan said money is getting so tight people cannot afford to do things or buy things. He said his tax on a house was $124 annually when he built it and now he pays $3,975 annually in taxes on the same house. He paid $350 in taxes on a second house he bought and now pays $1,200 a year.
Jordan said people look at what their taxes will be before they move here or start a business here.
“I’d rather you all look at scaling back (expenses) rather than increasing taxes,” he said.
Attorney Kent Smith related that in a meeting with state officials, he was told that the mil rate for schools, and fire and police protection in Marshall County is half of what it is in surrounding counties. A businessman pays 20 cents per square foot in school taxes whereas in other counties the rate is 40 cents per square foot, Smith said.
“I’m surprised DeSoto County and Hernando have kept up the growth they have,” said Jordan.
Banker Steve Gresham said it is hard for people with loans to cash-flow or they cannot cash-flow with taxes so high. He said people are having a hard time making payments or renting out properties.
He acknowledged the reduced mil rate in 2008 but said the county revaluation wiped out that savings and, in fact, many people paid more taxes after the mil rate was cut.
“It keeps on coming back on the taxpayer and makes it hard for business to come here,” Gresham said. “We have fewer folks coming here and it makes it harder on the ones that do.”
Shane Strickland looks at the tax burden from the standpoint of putting local businesses at a disadvantage because they have to charge more in gasoline to pay the high tax rate than do stores in areas where taxes are lower.
He said prices of gas in New Albany and Olive Branch are cheaper because stations there have less overhead in taxes.
His station on the north side of Holly Springs costs $29,000 a year in taxes with $13,000 of that going into the county coffers, he said. And utilities are twice as high here as elsewhere, he said.
“We’re losing our gas business to Olive Branch, now,” he said.
A station on the south side of the city costs about $35,000 in taxes while a store he owns in Piperton, Tenn., only costs $13,000 annually, he said.
“We’re at $6,000 or $7,000 a month per store just in utilities and taxes,” Strickland said. “You see how bad it really is when you look at it property by property.”
Jakey Hurdle thanked supervisors first, then said business owners need more consideration – that the decisions supervisors make sometimes do not work. He said bankers undergo great pressure when their customers cannot make their payments.
“You know exactly the problems business faces in taxes and regulations,” he said. “History is replete with situations where nations raise their taxes (and fall). Rome failed because farmers quit producing agricultural products because government was taking it (profit) away from them. It’s easy to raise taxes but hard to cut expenses. I encourage you to exercise every means you can before you raise taxes.”
Realtor Greg Gresham said he sees signs of growth beginning to happen after five years of no growth.
DeSoto and Tate counties and Oxford are growing and we are not seeing it here, he said. One of the major reasons is taxes. It takes three months of the year of income on rental property to pay insurance and taxes, he said.
“You can’t cash-flow rental property,” Gresham said. “We have houses we cannot get people to look at. The citizens (mayor and board of aldermen, police chief) of Holly Springs took salary cuts, eliminated departments, combined departments, did everything they could to control tax.”
He reminded the board that the county was at the top of the list of 82 counties in mil rates a few years ago.
Gresham said the savings citizens saw in a roll-back in the mil rate was wiped out by the property revaluation. The revaluation caused some citizens to pay more taxes, he said.
The vacancy rate in commercial properties is 50 percent.
“We are not attractive and we are not going to tax ourselves into prosperity,” Gresham said.
Tax assessor Juanita Dillard said her employees have not had raises and some employees were rehired after Ronnie Johnson retired at a lower salary. She said equipment is wearing out and so are the trucks her assessors are driving. Dillard said she needs more of the one mil set aside for the tax assessor to operate her office.
The one mil brings in about $75,000 but her office actually gets to use about $20,000 and the board of supervisors gets the rest, she said.
“I just want my consideration first, this time,” she said.
Supervisor Charles Terry asked Dillard if there are any places in the tax assessor’s operating costs that can be cut, that “would not make you bleed.”
“We’re bleeding,” Dillard said.
Jordan asked the board to look at unintended consequences of tax increases – those consequences on businesses and private families.
Supervisor Ronnie Joe Bennett said the reappraisal of county property is required by the state of Mississippi and tax assessors and supervisors have no control over it. He said the costs of operating county government would be higher now if the board had not rolled back taxes 10 mils in 2010. And departments have been cut back two to three percent in the last five years.
“I’m in business and I know how it is,” he said. “We can’t compete with DeSoto County and Southaven. They have 398 square miles to cover and we have 700.
“This is the first time I’ve raised county taxes because we cannot function without it. We’ve been cutting these departments. I don’t see how we can go any further. I just wanted to express my opinion, too.”
Hurdle warned that property values are falling and that reappraisals are coming due. The board could have the mil rate set higher than it is allowable by law, he said. He said business people are trying to survive on what is left over and it is about to run out.
Bennett said the board of supervisors is just trying to survive this year’s budget. He said the state and federal government will get their share first and that the counties get the leftovers.
“We’re a puppy dog following behind and trying to get a nibble,” he said.
Supervisor Keith Taylor said the board, to cut costs, has not refilled positions in the last eight to 10 years.
He said the state formula has been unfair and has appraised property higher than the market value. He said the mom and pop businesses are the ones who are keeping people employed.
Bennett said county deputies are being underpaid but people want a deputy to show up when there is a problem. The Legislature gives tax breaks to big business but not to the small businesses.
Terry said the people should come to town hall meetings and make their concerns known. He said businesses lay off when they have to, but government cannot do that and keep up the level of service the public demands.
Steve Gresham said everybody agrees it affects something when taxes are cut or raised.
“I don’t know the answer,” he said. “We have opinions. We all live with it. When I go to work, I see county vehicles and equipment. I don’t have anything that nice. Are there ways to scale back?”
Taylor said the county makes back a lot of the cost of equipment such as tractors and road graders when it sells used property. So buying good name-brand equipment means the equipment lasts longer and that the resale value is better. A road grader was sold for more than the county paid for it.
“We’ve made money on Mack trucks,” said Bennett.
Strickland said he works from 80 to 100 hours a week. People making minimum wage or slightly better are not getting insurance and take home only about $400 a week, he said.
“How can they live?” he asked. “We can’t give everybody (every employee) insurance and we just can’t pay any more for labor. We forget the main people who count, the $8 or $9 an hour worker. Everything is going up and they are struggling. There is a lot more of them than there are of us (who are struggling).”
Hurdle said he scaled back production and laid off employees at his brick manufacturing plant in 2007 when the housing bubble burst.
“You have to give something up in order to stay in business,” he said. “It’s not politically expedient, but you can go more (make more cuts).”
“We can’t eliminate any road mileage or a tax collector or assessor,” said Zinn. “It’s not quite that easy.”
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