Lowndes County Tax Assessor/Collector Greg Andrews presents the amendment to the interlocal property tax agreement at the Lowndes County Board of Supervisors Monday. The board voted to raise the collection price from $120,000 to $200,000 each year starting Oct. 1.
Photo by: Hannah Greco/Dispatch Staff
July 17, 2018 10:56:04 AM
A Lowndes County Supervisors vote on Monday could knock an $80,000 hole in the Columbus city budget next fiscal year.
But city officials claim the issue caught them completely by surprise.
By a 4-0 margin, supervisors opted to raise what it charges the city to collect its property taxes from $120,000 to $200,000 each year, starting in FY 2019. District 5's Leroy Brooks did not attend Monday's meeting.
Tax Assessor/Collector Greg Andrews presented an amended agreement to supervisors Monday seeking the additional revenue. County officials say the city council now has until Oct. 1 to accept the changes or the agreement will be nullified, meaning Columbus will have to begin collecting its own property taxes for the first time in 17 years.
"They will have to handle the city's and city school's appraisals and collections," Board of Supervisors President Harry Sanders said. "If they don't do it, how are they going to collect them?"
Sanders also added that the $200,000 is not a negotiable amount.
The county has sent written notice of the amendment to Columbus Mayor Robert Smith and Chief Financial Officer Milton Rawle.
Lowndes County first agreed to collect the city's property taxes in 2002, allowing the city to close its tax office. At the time, Andrews said, the agreement called for the city to pay the county $120,000 per year for the service, as well as 5 percent of total vehicle tag collections -- which amounted to another $120,000.
But in 2009, the city requested, and the county agreed, to reduce the vehicle tag percentage to 2 percent, which reduced what the city paid the county for that service to roughly $55,000 annually.
By raising the property tax collection fee to $200,000 now, Andrews said the county is trying to recapture what it's been losing over the last nine years from the vehicle tags.
Andrews said the increase would go into the county's general fund and not to the tax office itself.
The county also handles the tax collections for the city of Artesia, Caledonia and Crawford but does not charge them a service fee.
City had no notice
Smith said the city was blindsided Monday morning with word-of-mouth news of the supervisors' vote.
He told The Dispatch no county official -- including Andrews, County Administrator Ralph Billingsley or the supervisors -- had even broached the subject with the city prior to the vote.
Also supervisors added the amendment to the agenda after Monday's meeting began rather than including it in the agenda published prior to the meeting.
"You would have thought they would have come to the table and talked to us about it beforehand, but instead, all of a sudden, they make this drastic change," Smith said. "To hit us in the face with this, it's a big jump."
Smith argues the agreement in place actually affords the city nine month's notice before it can be terminated, meaning he doesn't believe it can be nullified on Oct. 1 even if the council balks at the amendment. In that time, he hopes to work out a compromise with the county for a lesser increase.
In any case, Smith said it would likely be more costly for the city to collect its own ad valorem taxes. It would require purchasing or renting an office space, purchasing software and hiring as many as three new employees to run the operation, he added.
"I would guess it probably would cost $300,000 or more (per year)," he said. "But honestly, we don't know exactly how much yet because we haven't really had time to look at it."
According to records Andrews provided The Dispatch, the city spent $380,000 to collect its own property taxes in 2001 -- the final year it did so.
Consequences to CMSD
Currently, CMSD and the city have a separate agreement where they share the costs of the $120,000 fee the county charges to collect property taxes.
CMSD pays $85,000 toward the service fee, or 70.8 percent, since the school district receives the lion's share of the actual tax collections.
With the increase, if it's divided by the same portion, CMSD would shoulder $141,600 of the new fee (an increase of almost $57,000 per-year). The city would see its share upped by more than $23,000 to roughly $58,400.
CMSD Board president Jason Spears said he would want a discussion to negotiate new terms of the agreement between the public schools and the city, should the city approve the $80,000 increase.
"I think when it comes down to the overall amount if we're having to pay a collection fee and we're a sub-organization from the city council and board of supervisors. ... It would be something that we would need to have some sort of insight discussion," Spears said.
If the $200,000 figure holds firm, Smith said he's not sure how the new costs would be divided among the city and CMSD.
He told The Dispatch, however, city officials would afford the school district a voice in the process.
"We haven't even gotten to that yet," Smith said. "I'm quite sure the school district will share in (the new costs). But we haven't even gotten to talk to them yet. This just hit the city like a shock (Monday).
"We will have to sit down with the superintendent, deputy superintendent and their accountant to work that out," he added.
Box: County trying to 'stick it to the city'
Andrews also claims he approached city officials with the possibility of this amendment "four or five months ago."
Like Smith, Ward 3 Councilman Charlie Box said that never happened.
Box said he believes the county is doing this to "stick it to the city" as the two entities continue to argue over a completely different issue -- splitting assets from the former Columbus-Lowndes Recreation Authority.
The county split from CLRA in October 2017, and each entity has started its own recreation department. But the county feels it's owed roughly $74,000 between equipment the city bought with CLRA funds for which it never reimbursed the county, as well as bank account balances the city kept control of after CLRA dissolved.
"As far as I know, nobody knew a thing about (the tax amendment)," Box said. "... That's not the way a city and county should operate. There should be some communication.
"It seems like ever since the split with the recreation, they want to get completely away from working with the city," he added. "I'm kind of tired it."
According to the Mississippi Department of Revenue, fewer than 25 cities in the state handle their own taxes, and most of these are smaller towns.
Lee and Oktibbeha counties handle both the county tax collections for the cities that reside in them. Oktibbeha County charges $50,000 each year for the collection of Starkville, according to County Administrator Emily Garrard. Adams County charges Natchez up to $52,000, and Lee County charges Tupelo $120,000 annually.
Reporter Slim Smith contributed to this report.
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