by James Coleman —
Shelby County Commissioners discussed a possible tenth-of-a-percent property tax increase during their Monday (May 24) meeting to square budget priorities with the state’s accounting demands.
At question is the county’s proposed certified property tax rate of $3.451 per $100 assessed value. An additional tenth of a cent would bring the increase from $3.45 to $3.46.
“I got an email stating this morning (that) when we pass the third and final reading that we can only round it to two decimal points, which would make it $3.45. We would lose the .001,” said commissioner Edmund Ford, Jr., chair of the commission’s Budget Committee.
Chopping off the dangling one thousandth from the current rate would have consequences.
For starters, revenue from the tax would drop from $1.88 million to $1,651,365.
“Commissioners, when we start looking at amendments and everything next week, that .001 is $229,000. I think that when we start looking at what the revenue is – even though someone may think .001 is nothing – we are going to start looking at possibly knocking off things on the wish list. I think there are some items that could easily require the $229,000…or less,” said Ford.
The current rate of $3.451 isn’t factored to the penny. During earlier budget discussions between the administration and commissioners $3.45 was the agreed upon rate.
However, the extra decimal point that made it into the final number won’t register.
“We discussed the $3.45 because, in adopting the certified rate, the state requires that you round down if any changes are made. The 3.451 rounds down,” said Mathilde Crosby, director of Administration and Finance for Shelby County.
“Our billing system can only do to-the-penny. So, we can’t have it be that part of a penny.”
The old rate was $4.05.
Property values in the county have risen more than 20 percent. The proposed $3.45 was calculated to reflect the new values without creating a windfall for a county o municipality.
State law requires the new rate bring in the same amount of revenue for the county as the old one. The county currently reappraises properties every four years.
A penny increase on typical homeowners wouldn’t amount to much in their overall bill. Homes in Shelby County are taxed by multiplying the certified rate and 25 percent of a home’s assessed value. The sum is then divided by 100.
Under the proposed $3.45 rate, the owner of a home would pay $862 a year in county property taxes. If the rate is raised to $3.46, the owner would pay $865.