Starkville residents should see 6.35-mill tax increase next fiscal year due to city and county investments toward industrial recruitment, improvements to its municipal police station and an expected county road bond.
Aldermen are expected to raise taxes by 3.6 mills for Fiscal Year 2016-17, increasing the rate from 21.98 mills to 25.58 mills, while supervisors forecast a 2.75-mill increase, with the overall countywide operating rate jumping from 118.99 mills to 121.74 mills.
The third destination for local taxes, the Starkville-Oktibbeha Consolidated School District, previously approved a fiscal year budget that is expected not to require a tax increase. Superintendent Lewis Holloway previously said the district will fund constructing bonds for a partnership school for grades 6-7 with millage rolling off the books this year. That campus will be built at Mississippi State University and also house MSU’s College of Education.
Ad valorem rates affect how much residents pay for real property, including taxes on homes, rental properties, businesses, business fixtures and equipment, car tags and utilities.
A 6.35-mill increase means a homeowner utilizing homestead exemption will pay an additional $63.50 annually per $100,000 of assessment. Commercial property owners pay a higher ratio.
Both boards have committed to funding infrastructure and other improvements to a Golden Triangle Development LINK-backed industrial park. The city is expected to allocate 2.6 new mills toward debt service on its $7 million commitment, while supervisors are allocating 1.75 additional mills for its $7 million portion.
Ward 6 Alderman Roy A. Perkins also successfully lobbied for a 1-mill increase this summer to specifically fund renovations to Starkville Police Department, while District 2 Supervisor Orlando Trainer found board support to allocate an additional mill for road and bridge improvement.
Supervisors are expected to schedule a work session for their road bond options, including a 10-year note, in the near future.
Language in Perkins’ motion setting the 1-mill city increase calls for the additional tax levy to roll off the books once the SPD improvement bond is satisfied.
Ward 5 Alderman Scott Maynard said both city projects are investments in Starkville’s future.
No other tax increases are expected for the upcoming fiscal year, said Maynard, who serves as the chairman of the city’s budget committee.
“The industrial park gives the LINK property that can be marketed for a variety of industries, and the police department will be positioned for the next 20 years,” he said.
District 1 Supervisor John Montgomery said the 1-mill increase for infrastructure improvements is needed since the county has lagged behind with road repairs. The county does well to stay in its overall budget, he said, and supervisors do not take tax increases lightly.
“I understand putting a mill to fund (road improvements) because they’re a necessity, but at the same time I understand the hesitancy of some not wanting to have it since taxes are already going up anyway for the industrial park,” he said. “I feel like we, as a county, pride ourselves for being able to work within our budget. As times go on and prices adjust, we wouldn’t be asking for this mill if it wasn’t a necessity.”
Both boards are scheduled to approve their respective FY 2016-17 budgets by mid-September.
Board unveils Wal-Mart TIF
Aldermen are also expected to schedule a public hearing on a 15-year, $1.5 million-maximum tax increment financing package that will fund public improvements associated with the pending construction of a Wal-Mart Neighborhood Market and fuel center in east Starkville.
The developer, Wal-Mart Stores East LP, is asking the city and county for tax diversions to help fund infrastructure improvements, including a traffic signal on Highway 12, for the proposed 43,000-square-foot development.
Specifically, the developer is asking Starkville for a 100 percent ad valorem pledge and a 50 percent pledge of sales taxes, while the county will receive a request for a 50 percent property tax diversion.
Those pledges will help fund bond payments in the future.
The project will create a grocery store in an underserved area of the city and lay the groundwork for future development.
Once completed, the 7.58-acre development is expected to generate an additional $134,000 in annual property taxes. SOCSD is set to receive an additional $64,000 – school taxes cannot be waived – while the county (about $48,000) and city ($21,000) will see additional revenues.
A report by TIF advisors Gouras and Associates estimates the Wal-Mart Neighborhood Market will generate $20 million in annual sales, which will result in an estimated $259,000 sales tax rebate for the city each year.
It also forecasts a $146,000 annual debt service for the bonds at a 5.5 percent interest rate for 15 years.
About 150 construction jobs are needed to build the store, the report states, while 95 associate positions are expected to be created, with an annual payroll estimated at about $2 million.
The public hearing is expected to be held Sept. 20.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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