Lowndes County School District is suing the county’s board of supervisors over $3.4 million in property tax revenue the district claims it was unlawfully denied.
The school board is asking for the county board of supervisors to pay the disputed amount after supervisors denied the district’s request for $27,421,842 in ad valorem taxes to help the schools operate this fiscal year. Instead, supervisors would only approve $24,069,767.
At issue for both entities is the legal definition of “new property.” By law, a school district can only request an up to 4 percent increase of its previous year’s local property tax collections for operations without the potential for voter involvement. Between 4 and 7 percent opens up the possibility for a voter-petitioned reverse referendum, and an increase beyond 7 percent triggers a direct referendum — meaning it must be approved by voters to be implemented.
However, LCSD claimed, in both the lawsuit and when submitting its $27.4 million request, that expiring fee-in-lieu agreements should be considered “new” property, since they had never been on the tax rolls.
By law, a school district can claim revenue from new property that hasn’t been on the tax rolls, and that revenue is exempt from being considered as part of its percentage increase in operations, according to district officials.
Companies investing a certain amount can agree with cities or counties on fee-in-lieu agreements — essentially paying a fee of one-third of their tax bills in lieu of full taxes for up to 10 years. The county saw 13 fee-in-lieu agreements, which would have generated $3.4 million in additional tax revenue for the district.
Counting this revenue would have caused LCSD to raise property taxes by 4.55 mills. Also, supervisors believed since the companies had paid the fee for 10 years, they have been on the tax rolls, despite not paying full taxes. Therefore, they cannot be considered new property.
Moreover, the county’s decision not to allow LCSD to claim all the revenue from the fee-in-lieu expirations actually decreased the district’s tax rate by about 2 mills for 2021.
In the complaint, LCSD is asking for a declaratory judgment for the disputed amount, as well as any legal costs and attorney fees.
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