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Budget approved, millage rate vetoed

August 27, 2018 GMT

County commissioners were set to meet on Tuesday for special called session to override veto of 11.475 mills

Depending on when someone picks up the newspaper this week, there might have already been an increase in the millage rate. Or not.

The winds of fortune for Polk County taxpayers completely depend on whether commissioners will vote to override a veto of the millage rate approved in a 4-1 vote in a special called session, or whether they’ll have to decide on a new one.

Commissioners gathered on Aug. 21 and 22 in one session to discuss how once again they’ll balance the budget, and the following night settled on spending numbers, but didn’t settle where the revenue will come from.

Several rates were put up, but none stuck after Commission Chair Jennifer Hulsey vetoed two rates, and others were voted against as the board couldn’t agree on where to set millage for 2018 tax bills in the county. They did approve the Polk County Board of Education’s 16.08 millage rate, which this year is set lower than the previous year.

It marked the seventh discussion of the budget since it was proposed by the county administration.

They were set to meet Tuesday after press time after Commissioner Hal Floyd gathered enough signatures from the others who approved a rate of 11.475 mills for the county, but saw it shot down in a veto. If they successfully override the veto during the meeting, that will be the rate that shows up on tax bills.

County Manager Matt Denton said that should commissioners fail to override the veto, they can vote on others until they settle on a rate. They need to do so before Sept. 14, when the state is set to come and give their approval of the tax rolls for 2018.

Bills usually go out by the end of September with millage rates from the cities, school board and county and are due by December 1. If there is any delay past the Sept. 14 deadline to get the state to sign off and tax bills go out later, property owners will be given an extension past Dec. 1, Denton explained.

Last week’s vote and subsequent veto mark the latest chapter in the story over the budget, which began back in the spring when commissioners first sat down to determine revenues and expenditures for the 2019 fiscal year.

How it got to this point over two days is a story with several parts, which will start with an admission of error on the part of Denton.

Balanced, then not

Trying to come up with the right numbers for the county government’s 2019 fiscal year hasn’t been easy. A lot of figures have floated around since May, and keeping up with a target to hit for a balanced budget has moved around a bit based on what priorities the commission seek to fund as well.

Certain expenses can’t be helped at the moment, such as the increase in the cost of group insurance. Others can, like how much the county spends on new computer equipment, for example.

The evening work session on Aug. 21 began with a new target of funding to hit before the budget was balanced due to a calculations error on the part of County Manager Matt Denton.

He explained at the start of the meeting that when he figured in budget revenues and expenditures based on requests of the commission to adjust revenues based on updated expectations of what should come in. Instead of figuring that less than 100 percent of tax collections will come in during the 2019 fiscal year.

After a finance committee meeting with commissioners last week on Aug. 15, he and board members in attendance thought they had the problem of needed additional revenue solved with a surplus in place without the need more funding sources to be found.

Denton did commend during his explanation of what happened Sheriff Johnny Moats for finding more money in the budget.

“When I met with Muriel (Dulaney, Director of Finance for the County) again, (I) quickly realized we were looking at the 100 percent number for the tax digest for the budget, and not the 95 percent number we usually use,” Denton said.

He put together his latest handout to show that with the error, the county now needed more than $141,000 to balance the budget, without any requests for funds the commission sought to add on their own, like establishing retirement funds for constitutional officers, or to pay for needed items like an increase in costs for the contract providing medical services at the Polk County Jail, or food for those inmates.

The numbers differed from the target set back earlier in the month during a work session on the budget, where commissioners needed t o find some $315,848 in additional revenue, along with another $603,202 in requests over the planned budget for the year.

Back in May, the county put forth a budget calling for $22 million in revenue and expenditures for FY 2019, and since then the actual dollars and cents needed haven’t changed significantly.

Those numbers according to Denton’s handout now stood at 22,044,371 after an additional $50,000 in departmental cuts, and then with $55,541 in must-have items, like inmate food and medical.

Some of the money needed to balance the budget added in – even after the error – was found by Polk County Sheriff Johnny Moats, which Denton said was helpful to making up for shortfalls.

The county manager provided several options for commissioners to follow to figure out how to make up for the new shortfall.

Denton said one was to use additional funds on top of what is being planned for FY 2019 out of the landfill funds (currently $1.79 million, with $1.5 million of that coming from what would have been this year’s payment to the fund,) to make additional cuts in expenditures to use in other areas and balance the budget, or raise the millage rate.

He provided several optional millage rate values, how much they would need to balance the budget and cover additional wanted items such as the inclusion of retirement for constitutional officers like Moats, Tax Commissioner Kathy Cole, Superior Court Clerk Sheila Wells, and Probate Judge Linda Smith.

That rate would take 11.299 without money used from the landfill. The county advertised a rate of 11.5 for 2018 tax bills, but has in the past years rolled that figure back.

Commissioners ended up approving a budget on Aug. 22 that for the moment uses landfill money to balance since no millage rate was set yet. The board can go back and amend the budget should they decide to set a millage rate above that.

Landfill vs. millage rate increase

The question over how to balance this year’s budget comes down to two different thoughts on the money available to the county, and how it should be used or saved.

In the briefest of summaries as of last week’s meetings, this is how the commission currently views budget figures and taxes:

Floyd said previously and in the two meetings last week that no matter what, he only wants to use this year’s landfill payment of $1.5 million to help balance the budget and no other funds, and leave alone the balance of more than $8 million, and instead increase the millage rate.

His argument, along with that of Commissioner Jose Iglesias, is that commissioners left property taxes too low for too many years, and that an increase is needed this year to get things back in balance, with additional spending used to increase some pay scales while the commission waits for the return of the Carl Vinson Institute of Government at the University of Georgia to complete a pay study.

Commissioner Marshelle Thaxton during the Aug. 21 meeting agreed and said several times he felt the millage rate had been too low for his entire run in office, despite his votes to keep that rate low with other commissioners in past years. Thaxton isn’t running for a new term in office on the county commission after 12 years of service.

Commissioner Chuck Thaxton also argued in past months to avoid touching the landfill money in the future, and agreed with ideas put forth to establish a trust fund for future generations with proceeds generated from the contract with Waste Industries on an annual basis. However he saw immediate needs that would require the use of this year’s payment to cover, and maybe more.

Both Thaxton’s voted for the 11.475 mill rate, along with Floyd and Iglesias.

Hulsey and Commissioner Scotty Tillery don’t want to head in the direction of a tax increase this year, especially during a year when voters are being asked to extend the Special Purpose, Local Option Sales Tax after 2020 through 2026.

Instead, they want to keep the rate the same through 2019 after the Carl Vinson Institute pay study comes in, and then make adjustments next year to fix several issues including how much employees make.

Commissioners did agree on the budget during their Aug. 22 session, approving the revenue and expenditures for the year at just over $22 million in projected collections and spending, with the inclusion of retirement pay for the county’s four constitutional officers.

Several items proposed to be added to that budget either failed to make it onto the county’s agenda on Aug. 22, or were tabled until a future meeting until a millage rate was agreed upon.

Proper procedure

Commissioners did have a problem with the way the agenda was setup during the board’s special called session on Aug. 22. For at least 20 minutes, board members called into question the way the agenda was setup.

Even County Attorney Brad McFall – who admitted he hadn’t looked over the agenda before the meeting last week – said it seemed a bit confusing to him as well, since the millage rate question was placed after the approval of the budget, the first item up for consideration.

McFall did explain that in the past, commissioners had approved a budget “knowing that tax revenues were insufficient to cover the balance in that budget, and the board chose to supplement the funding through the landfill fund.”

Tillery and Hulsey both tried to explain to board members they could approve the budget the way it was laid out without having to first approve the millage rate, since funds would be used from taxes before the landfill and amendments can always be made after passage.

Commissioners later tabled additional amendments proposed by Floyd on Aug. 22 as the question over the millage rate remained undecided.

During discussions over the budget, Iglesias tried on both nights to get specific answers from Dulaney about budget numbers, and was shot down by Floyd the first night before he insisted on an answer the second night when he asked how long the county had gone without a millage rate increase.

He’d begun arguing that “not having a millage rate increase is the same as someone getting an automatic tax exemption” and then specifically requested an answer from Dulaney, not her immediate supervisor Denton.

Thaxton provided his answer of “it’s been about 12 (years)” but based on the five-year tax digest published in the Standard Journal, the rate was a low as 10.85 in 2013, and increased to 11.021 in 2014.

For and against a rate increase

After gaining all the signatures he needed late last week, Floyd said during a Saturday interview he felt that with a rate increase to 11.475, the numbers would match up. In follow-up discussions with Denton on his own and based on calculations he made of figures, the county should be close to only using the $1.5 million from the landfill payment for FY 2019 to supplement expenditures.

“Certainly it is a lot better than the 2.1 million we were going to take at one point in the process,” Floyd said.

Comments were sought over the weekend from Marshelle Thaxton, but declined to add anything further.

Commissioners Chuck Thaxton and Iglesias were also sought for comment, but didn’t return calls at press time.

Following her veto and ahead of the Tuesday meeting, Hulsey e-mailed the following statement about her veto of the millage rate to the Standard Journal on the evening of Aug. 23 following the Aug. 22 meeting:

“On Wednesday night, I vetoed two votes on the mil rate. The first was for 11.5 mil rate increase and then a 11.475 mil increase. The 11.5 increase vote failed because it was a 3 (yay) to 2 (nay) vote. With my veto it failed. The second vote of a 11.475 mil increase with a 4 (yay)to 1 (nay)vote I vetoed,” the statement read. “If the commissioners that voted for the 11.475 tax increase wish to appeal my veto they can. The majority of the board can call to revoke my veto and pass the vote due to the fact it was a 4 to 1 vote. This vote was improper and I was not going to sit back and allow them to do it without making it clear I am adamantly opposed to their actions.”

She added: “The taxpayers expect commissioners that represent them to be fiducially responsible. I feel this vote for an increase was not. What this vote says is that the county used tax payer money to balance the budget. The people of Polk County didn’t gain services, they gained a bill. Yes we as commissioners must make tough decisions, and I take them very seriously because my vote speaks for the people.”

Tillery also spoke out about why he doesn’t want to see a millage rate increase as well.

“I made a motion to balance the 2018 budget using $211,762.00 from our healthy unreserved landfill fund balance and that motion failed,” Tillery said in a statement. “At this point, I knew a planned mill rate increase was coming.”

It continued “Understanding we have a fund balance in our general fund and our landfill fund, I made a motion to set the mill rate at 11.061, which is the same mill rate as 2017. My motion did not even get a second and it failed. I am not sure how many mill rate increases were proposed because I stopped counting at five. Later the majority voted to increase the mill rate from 11.061 to 11.45, with me voting against. The mill rate did not include any additional services to our taxpayers, any additional benefits to the employees or a plan to better our county. Basically, the mill rate increase will be used to balance the budget.”

“I cannot justify raising our mill rate, unless we are increasing services, increasing all employees salaries or to better our county,” the statement concluded.