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County revenues 'sobering'

Staff warns commissioners of money woes

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POSTED: February 13, 2013 1:00 p.m.

Despite recent millage-rate increases, Liberty County’s revenues still are lagging.
Finance Officer Kim McGlothlin on Friday cautioned the board of commissioners to brace for a rough budgeting session as the 2013 fiscal year continues and into planning for fiscal year 2014. She showed an overview that compared the county’s actual year-to-date revenues and expenditures to its budgeted amounts and to a three-year historical look during a recent retreat at the MidCoast Regional Airport.
The presentation was intended to show a detailed look so members understand why the fiscal situation is tight and why there is “a little bit of worry,” County Administrator Joey Brown said.
The same message needs to be sent to constitutional officers and the courts, Brown said.
“They never get to see this. They’ve heard us say, ‘We’re tight, we’re tight, be careful,’ … but they don’t see the numbers in this detail,” Brown said.
“It’s sobering,” County Commission Chairman Donald Lovette said.

LOST revenues down
A sinking property digest and sluggish sales within the county are factors to blame for the falling revenues, but smaller funding sources also impact the county’s outlook.
Local option sales tax, or LOST, numbers through the end of December are below projections.
“Even at 50 percent, you can see LOST is down from what we projected,” McGlothlin said. Through January, the county collected $1,632,326 — only 45.98 percent of the projected amount for this time of year, which should be at 50 percent.
Within the county, sales-tax collections are down, but the county also receives a smaller portion of the revenue than it did before the LOST renegotiation with municipalities that was triggered by the 2010 Census.
District 3 Commissioner Connie Thrift pointed out that consumer shopping habits — such as online purchasing or trips to Savannah — could be a culprit. She also mentioned the Liberty County Chamber of Commerce’s “Shop Local, Shop Liberty” campaign.
“I want to go back to something that Commissioner Thrift said about shop local. That’s not something that the chamber needs to say; that’s something that we all need to say,” Lovette said.
District 2 Commissioner Justin Frasier asked how the business community has been affected.
“Working with the LCPC to make it more business-friendly helps — anything that’s business-friendly helps,” Lovette said.
Frasier mentioned that more linking online between entities such as the county, city and planning commission could ease the process for prospective businesses.
He cited a four-county industrial authority initiative in North Georgia around Walton County that has led the area to anticipate 1,500 jobs with a median income of $60,000.
“That just shows working together, it does work,” Frasier said.
Assistant County Administrator Bob Sprinkel added that the area has to overcome the national-media perception that Fort Stewart constantly is at risk of losing soldiers because prospective businesses take note.
“What happens when the Golden Corrals of the world just hear that? What does that do to our community?” Sprinkel said.

Property taxes down
On a year-to-date look, property-tax revenues are down, but McGlothlin said that’s not so worrisome since tax bills were delayed going out, which means the payments are delayed coming in.
More alarming is the downturn in real property values, according to graphs she presented.
From 2005 to 2007, the county tax digest — which determines the assessed values of all properties to be taxed — saw both real and reassessed growth.
Graphs that McGlothlin presented show the gross digest peaked at about $520 million in 2009, and it has decreased since to about $460 million. In addition, taxpayers have claimed more exemptions, with more than $90 million in tax exemptions for 2012.
As a result, the 2012 net digest is just above $360 million — far below its 2007 rate of $390 million. In 2008, the net digest peaked at an estimated $430 million and has declined since.
Because property taxes are the county’s largest revenue stream, the dip has a heavy impact.
“You either have to significantly cut services — and/or people — or find other revenues. There’s just no getting around it,” McGlothlin later said.
Personal-property and motor-vehicle taxes also are down, having received $539,042, or 42.78 percent of the budgeted amount. Because the collections on personal-property and motor-vehicle taxes are a seven-month look, that collection percentage lags behind the ideal rate of 58.33 percent.
“I’m not sure we’ll even end up achieving what fiscal year ’12 was,” McGlothlin said, adding that the finance committee analyzes the numbers to determine whether factors such as deployment are to blame.
District 1 Commissioner Marion Stevens Sr. asked whether property owners placing their land into conservancy results in a decrease in taxable property.
Brown explained that the issue is a complex one because there are conservation easements and Georgia land trust deals, which lead to different tax scenarios.  
“People are doing anything they can to get a tax break,” Brown said, adding that residents now are taking advantage of agricultural exemptions by using the minimum amount of land required and growing crops like berries.
Brown suggested they engage Tax Commissioner Virgil Jones to help the board examine how issues like conservancy and timber harvests affect property taxes.

Other decreases
Another large line item is the county’s prisoner-housing fee, which was budgeted at $650,000 and has received $204,111.
The county receives $35 per day per inmate from housing inmates for other agencies such as police departments, Fort Stewart and the U.S. Marshals. But a problem with the U.S. Marshals last year resulted in the Marshals stalling its use of the Liberty County Jail, which has affected revenues.
McGlothin said the sheriff’s office indicates that the issue with the marshals has been resolved, and they have resumed their use of the site. She anticipates the county will make at least half of the budgeted amount.
Lovette asked what does not get paid in the event of a shortfall.
McGlothlin said historically — but not in most recent years — the county closed fiscal years with a surplus, even when revenue fell short, by decreasing expenditures in the departments under the county administrator’s control.

Current year expenditures
As for expenditures, McGlothlin said departments collectively are at 57 percent expended, whereas in previous years they would have been lower.
“We have just made it so tight that I don’t think operating with a 7 or 8 percent under budget is going to happen this year. That’s where we are. I think we’ll come under budget this year — I don’t think we’ll be over,” she said, explaining that the margin will be narrower than most years.
Thrift pointed out that were it not for the $3,687,182 Office of Economic Adjustment allocation to the county in 2012, which has been used or allocated for capital projects, the county would have been in the red.
“The last three years, when you look down there, when you closed the books, we have been in the red,” Thrift said. “That is a point that we’ve got to drive real hard.”


 

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