Statesboro’s mayor and council will hold the first two of three required hearings Tuesday, Sept. 10, at 12 noon and then 6 p.m. on an advertised 24.56% proposed increase in city property tax. The council by a 4-0 vote in June adopted a budget that factored in a probable one-mill increase in the tax rate, from 8.125 to 9.125 mills, but actually setting the millage is a separate process to be completed before Oct. 1.

That 1-mill rate hike by itself would be a 12.3% increase, but it follows a roughly equal inflationary rise in the value of taxable property within the city limits as determined by the Bulloch County Board of Tax Assessors staff. Under the state law known as the Georgia Property Taxpayer’s Bill of Rights, local governing boards such as city councils, county commissions and school boards must roll back their millage rates to compensate fully for inflation in assessed real estate values or declare a tax increase and hold three hearings.

In this case, City Council would have had to change its millage rate in the opposite direction, lowering it to 7.326 mills, the “rollback rate” determined by the assessors’ office as sufficient to offset inflation in the tax digest values, to avoid the hearings. The announced increase of 24.56% is the difference between the 7.326-mill rollback rate and the proposed rate of 9.125 mills.

On average, the resulting tax on a home with a 2024 fair market value of $200,000 and the standard homestead exemption will be $140.32 higher than last year’s tax. The average tax on a $200,000 non-homestead property will be $143.92. These are “on average” because the property value inflation part varies with neighborhood and building type.

Last spring, City Manager Charles Penny and Finance Director Cindy West presented a fiscal year 2025 budget they said would require either a projected $1.7 million drawdown in the city’s general fund balance or an increase of up to 1 mill in the tax rate. A $1.7 million drawdown of the balance would have left a reserve equal to about 23% of projected spending, West reported, which would have been less than the city’s 25% standard.

So Penny always recommended a millage increase, but he said it might be less than a full mill, if the real growth in the digest was sufficient. Local governments can take advantage of increased revenue resulting from new construction and property improvements without this counting as a tax hike. However, when the final digest was determined, real growth in the city limits was small relative to inflation, as seen by the 24.56% tax increase plus the real growth resulting in net revenue growth of 26.76% to the city.

These numbers were all shown in the “Notice of Property Tax Increase” and “Tax Digest and 5-Year History of Levy,” the city published as an ad in the Sept. 5 Statesboro Herald.

“We weren’t recommending a rollback at all,” Penny said in a brief interview Tuesday, Sept. 3. “The pay plan was $2.3 million, and with the fire fund we had to put in an additional million dollars just to keep (up with costs), and I mean that was personnel, and even receiving funding from the county, we’d be using fund balance in the fire fund, with the new staffing and all that.”

The fiscal year 2025 budget, approved in June, has been in effect since July 1, but only now is the city required to hold tax increase hearings. The third tax hearing is scheduled for 5:30 p.m. Sept. 17, also the time of the next regular City Council meeting, during which the council can vote to formally set the rate.

Pay plan costs

Salaries and other payroll and benefit costs make up about 63% of the city’s general fund spending, Penny noted during the June budget hearing. Although no new across-the-board raise for city employees is included in the fiscal 2025 budget, a major portion of the increased general fund spending is the new pay plan the council adopted last December after a compensation study, resulting in raises in January 2024 for 300-plus city employees.

Only in the current budget will the city government first see a full year’s cost – July 1, 2024-June 30, 2025 – of the pay-plan raises, and the city is also continuing a system of pay-for-performance raises, with costs varying annually.

All of the raises and three added positions contribute to a $1.16 million expected increase in spending for salaries and benefits over last year’s costs in the general fund. The $2.3 million he spoke of was with the full year’s cost of the raises.

Fire fund subsidy

Separate from the general fund, the fire fund covers operations of the Statesboro Fire Department. In addition to city funding, it receives revenue that the county government collects through a special millage for the SFD’s service to areas outside the city limits within five miles of its two stations.

The SFD added nine firefighter positions with city funding beginning in 2021, and 12 more beginning a year ago with a federal Staffing for Adequate Fire and Emergency Response grant. The SAFER funding continues to pay the 12 salaries for three years.

“Even with SAFER, we get the salary (from the grant), but any increases, or any of that stuff, that’s on us. …,” Penny said. “And when we negotiated our deal with the county, we projected out for the three years, and I pretty much told them we would make it work for that three-year period, but I guess in 2027 we will come to them for some additional support, because at that point we absorb the full cost of the personnel.”

2023 compromise

A year ago, in September 2023, Penny had recommended a 1.9-mill increase over the previous 7.308 mills, which would have made the rate 9.208 mills. However, after hearings, City Council on a compromise motion approved a 0.82-mill increase instead, with the result later rounded to 8.125 mills. Penny had recommended the higher rate in anticipation of a new pay plan resulting from a compensation study, and other increased costs.

After the compensation study was completed, the council in December approved the most generous of the pay plan options and made the raises apply to all employees, not just public safety personnel.

In June, one of the council members, District 2’s Paulette Chavers, said she wished the council had approved the larger increase last year.

“Now we’re jacking up taxes again, and I’m feeling some type of way about it, because what I indicated is happening,” Chavers said then. “A second time we’re jacking up taxes. We should have done that the first time and been done with it. Now we’ve got to do it again. We’re going to be the villains now.”

But no citizens spoke against the budget at the June hearing, and the vote to approve the budget was 4-0, with District 4 Councilman John Riggs away.

The proposed 9.125-mill rate is still lower than the rate originally proposed last year, and city staff members previously presented a chart showing Statesboro’s rate is about midrange in a selection of rates from similar-size and nearby Georgia cities.