Starkville aldermen scale back tax increase by almost a mill

September 4, 2013 9:47:13 AM

Carl Smith - [email protected]


The Starkville Board of Aldermen's message to city department heads was simple: Be prepared to deal with more budget cuts as we trim back a proposed tax increase. 


Aldermen began the process Tuesday to scale back an almost 3-mill property tax increase by about a point by asking the city clerk to prepare a new budget based on a 21.98-mill ad valorem rate. Currently, Starkville operates a 20-mill ad valorem levy. 


To pull off the millage decrease while still tending to increasing expenditures, Ward 5 Alderman Scott Maynard proposed siphoning funding from vacant city positions, including the unfilled chief administrative officer's spot; delaying a Starkville Police Department hire for six months; and moving monies around to satisfy a recently approved Starkville Parks Commission budgetary increase. 


The board previously approved a $96,000 funding increase for SPC's operating budget, which would come out of the city's general operating fund. Maynard's request, however, decreases that funding stream's allotment by $24,000 while increasing the city's 2 percent food and beverage tax contribution to Parks by the same amount. The shell game creates neither a net gain nor loss in funding. 


It is unknown if the city will use 2 percent receipts from this fiscal year or projections from the upcoming year. 


SPC currently receives 40 percent of the city's 2 percent food and beverage tax collections, and those funds are limited to specific expenditures. Payments on electric bills, a subject of scrutiny by the previous administration, are not allowed with the 2 percent tax. 


SPC minutes also show the autonomous board received a $100,000 donation from NBA forward Travis Outlaw in June for naming rights at the Sportsplex. It is not known if aldermen factored that donation in when it previously approved SPC's funding increase. 


"Department heads, this board is going to challenge each of you over the next several months to be looking for better efficiencies within your departments," Ward 3 Alderman David Little said before the board took action on the new proposal. "Just because we've done it a particular way for several years now does not mean there's not a better, more efficient way to utilize technology and get the job done. You need to be aggressively looking for ways to save money within your departments." 


A new budget hearing is scheduled for Sept. 17. 


Many aldermen have begrudgingly admitted a tax increase is needed if the board is to handle increasing expenses, including a long-overdue pay raise for its employees, departmental requests, outside contributions and its plan for a new City Hall. 


Aldermen, including Ben Carver, Lisa Wynn, Roy A. Perkins and Little, again took exception to the previous board's City Hall construction plan, saying citizen input was left out of discussions. 


In its original budget, the city allocated $370,000 - now believed reduced to about $345,000 - for the project's debt service in FY 2014, but that figure is expected to increase to more than $500,000 in the following years. Since its implementation, officials have said the 20-year lease-purchase agreement would be funded by monies free in Starkville's budget, soon-to-be retired debt and organic growth. 


The municipal building fund is included in the city's capital projects line item, a $1.08 million budget which includes sidewalk accessibility projects ($132,000), street improvements ($350,000), storm drainage work ($100,000) and the Carver Drive ditch project ($53,000). 


Previously, Maynard said money to fund the City Hall project was available in Starkville's budget, but the city's proposed pay raise itself would require a tax increase. 


Property taxes are calculated with mills. One mill is worth one-thousandth of a dollar. For example, if the millage rate is 20 mills, a property owner pays $20 for every $1,000 of assessed value on his or her property. The assessed value of a property is the appraised value multiplied by the assessment ratio (10 percent for residential properties). The owner of a property appraised for $100,000 in this example would owe $200 in taxes. 


Municipalities, counties and school districts each establish their own millage rates to meet budgetary needs.

Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch