Starkville aldermen are not expected to raise property taxes in the upcoming fiscal year.
The board scheduled two hearings — one at 5:30 p.m. Tuesday and another at the same time on Sept. 15 — to unveil the city’s upcoming FY2015-2016 budget, a document that tentatively pencils in the same 21.98-mill ad valorem rate Starkville levied this fiscal year.
Although the city has yet to release the document to the public, officials say it will contain line items for three new police positions — two officers and an information technology worker — as well as software purchases to help Starkville Municipal Court switch to a digital filing system, a merit raise for the court administrator and a 3 percent, across-the-board pay hike for all employees.
But Mayor Parker Wiseman said aldermen balked at the city’s biggest operation need Tuesday.
A plan to increase the city’s minimum wage to $10 an hour could have been implemented in the upcoming fiscal year, he said, but the board passed on tasking him to present a budget with the new funding mechanisms.
Wiseman repeatedly asked the board to grant him permission to follow through with preparing a secondary budget with the new pay rates, but aldermen said they were not in a position to act on the matter Tuesday.
To fund his plan for six months, the mayor said it would draw $90,000 from the general fund, $36,000 from sanitation and $21,000 from the water and sewer budget.
The city could “comfortably fund” the proposal, he said, due to the $100,000 in savings Starkville will reap after it selected Regions Bank as its insurance agent of record and the expected $1.4 million it will have in its cash reserves at the end of the fiscal year on Sept. 30.
“I wouldn’t have brought the matter forward if I wasn’t positive that it could be funded in a financially sound manner, in a balanced budget without a tax increase. As I sized up all of the important things to accomplish in the upcoming fiscal year, this was our highest priority because it’s our biggest operational need,” he said Wednesday. “The good news is we met or made substantial progress on all of the other priorities I had in this budget. The bad news is I was unable to convince the board to consider what I deem to be our biggest need.”
Aldermen, however, said the request was made too late in the budgetary process. The city is required by statute to develop and approve a budget by Sept. 15. Besides mandating a 3 percent raise for the next fiscal year and a $10-per-hour minimum by 2017, aldermen have yet to hold a true budget meeting, opting instead to discuss issues at the board table as they emerge.
“We probably could do it in the budget, but the problem is (after the financial obligation) there’s absolutely no contingencies for emergencies. Things are going to come up, and it would make the budget too tight,” Ward 5 Alderman Scott Maynard said. “The other issue is anticipating sales tax returns keep pace with what they were last year. A lot of last year’s (sales tax receipts were) generated off a great football season that brought a lot of people to town. I hope that’s the case again, but you can’t just assume it will happen.”
Maynard also chairs the city’s budget committee.
“I still want to get to this, and there’s the possibility to do so next year. If we’re there in six months, great,” he said.
While officials remain optimistic about continued sales tax growth, leaders say the amount of revenue a property tax mill brings to city coffers increased.
Because of new development, Wiseman said the upcoming fiscal year budget was prepared figuring 1 mill will return $220,000, up $10,000 from the current budget’s formula.
One mill is equal to one-one thousandth of a dollar. Property taxes are calculated by multiplying a property’s true value by its assessment ratio and the millage rate. Assessment ratios are set by the Mississippi Constitution, and include five classes. A single-family, owner-occupied residential property’s ratio is assessed at 10 percent of the true value.
“Overall growth in assessed valuation leads directly to growth with tax revenues collected. We’re growing the way we want to grow, and that’s by growing the property tax base. It creates more revenue, while taxes stay the same. That’s the ideal situation,” Wiseman said.
Maynard added, “Look around town and look at all the activity and construction going on. Our budget from ad valorem should get stronger. Drive down Russell Street and you’ll see five projects going on. That’s exciting.”
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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