CITY REJECTS ROLLBACKS ON TAX RATE, SEWER FEE

CATEGORY: ALD Tupelo City Council

AUTHOR: MOULDE

CITY REJECTS ROLLBACKS ON TAX RATE, SEWER FEE

By Philip Moulden

Daily Journal

Tupelo’s City Council has rejected a proposal to promise a rollback in the 1996-97 tax rate to offset a state-inspired increase in property valuations that spurred some property tax boosts this year.

Council members Tuesday night also spurned attempts to reduce sewer hookup fees for homeowners brought into the city through annexation in 1989.

Ward 2 Councilman Sims Reeves, charging that the city reaped a windfall through a change in property valuations last year, asked fellow members to approve a 1.5 mill tax rate decrease for the coming year. Reeves contended the city got $411,000 it doesn’t deserve.

“I didn’t know anything about it till I got calls from people that had tax increases,” Reeves said. “If this motion doesn’t pass, we’re telling the taxpayers, ‘we’ve raised your taxes and we’re going to spend the money.'”

Lee County Tax Assessor Karrie Weathers reported last summer that the state was requiring the county to boost indexing in the formula used to adjust property values in order to maintain a semblance of assessment parity across the state.

The procedure also ostensibly assures fairness in taxes on existing property and new property, which is assessed at real value. Property taxes are determined by applying the tax rate to a set percentage of the value of a property.

But existing property valuation in Lee County had fallen well below true value, officials said. The only alternative to the indexing jump was to undertake an expensive countywide reappraisal.

The resulting increase in many property values led to tax hikes for many landowners, even though local governments may have kept tax rates at or below last year’s rates.

Projections

The city based its budget and tax projections on the county assessor’s estimates, and city officials also weren’t aware of the scope of the indexing change, Finance Director Lynn Norris said. However, current revenue estimates indicate original budget projections won’t be far off in a constantly changing situation, he said.

The loss of $411,000 could significantly impact the general fund, major thoroughfare program, bond repayment fund, and the police and fire retirement fund, Norris said. If allocated solely from the general fund, it would almost certainly cause substantial cutbacks in police and fire protection, he said.

“I think you have to keep moving forward,” noted at-large Councilwoman Carolyn Mauldin in opposing the motion. “You can’t cut taxes and keep expanding services.”

The proposal failed 3-6.

But had it been approved, the motion would have stood as no more than a “sense of the council” resolution. The city’s tax rate for 1996-97 will rest squarely on the council’s spending priorities set in September.

Whatever budget it adopts then, it must by law vote a tax rate sufficient to fund it.

Sewer tap fees

In another 3-6 vote, the council rejected a proposal by Ward 5 Councilman Tommy Doty to cut the $475 sewer tapping fee to $200 for people in annexed areas where sewer service was not available before June 1994, the month the tap fee was increased.

“It’s not fair,” Doty said of the higher fee. “It’s not their fault it (sewer) wasn’t available.”

But Mayor Jack Marshall argued that the fee was fair, and attempting to single out specific households for cuts would “create a nightmare.” In fact, Marshall said, the latest construction figures indicate sewer taps cost the city $559.

“If you want to give away the taxpayers’ money, vote for this,” Marshall said.

A separate motion by Doty to refund part of sewer tapping fees to about 144 people in annexed areas who have already tied into the city lines died for lack of a second.

In other action, the council:

– Approved the purchase of a tract of land on McCullough Boulevard west of Coley Road for a new fire station.

– Agreed to refund bonds issued in 1989 for construction of the Northeast Mississippi Water Supply District system, which supplies water to the city and nearby industrial parks. The refunding plan could save rate payers $3.5 million or more and pump additional sales tax dollars into water district coffers.

– Agreed to consider a proposal Feb. 20 to seek state authority to require a $25 annual privilege license for vendors at the Tupelo Flea Market.

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