Lowndes County saw more than $100 million of growth in its assessed real and personal property value over the past year, whereas the city of Columbus’ value remained roughly level compared to the prior year, according to the latest assessment conducted by Tax Assessor/Collector Greg Andrews.
The assessment, conducted annually, appraises the value of real and personal properties within the county, municipalities and school districts — an instrumental estimate government entities use to calculate potential property tax revenue and build their budgets for the next fiscal year.
The mixed projections between county and city values, Andrews told The Dispatch, can be largely attributed to the differences between area developments over the past year. While the county saw industrial growth and the expiration of multiple “fee-in-lieu” agreements — which offer property tax breaks to companies for up to 10 years — the city experienced a major loss of retail tenants at Leigh Mall, he said.
The county’s assessed value rose from $643.8 million last year to $749.7 million this year, according to Andrews’ assessment. Lowndes County School District, which he said had an assessed value of about $479.5 million last year, is now valued at $551.2 million.
The increases are mainly due to the expiration of 13 fee-in-lieu agreements in December, he said, including several with Indiana-based Steel Dynamics, Inc., Prime Metals and PACCAR. The county still has 41 such agreements in effect, documents show.
Fee-in-lieu agreements, which require at least $60 million of investments under the state law, grant companies that meet that standard up to 10 years when they pay one-third of regular property taxes to the county and its school district. After that, they begin paying full taxes.
District 2 Supervisor Trip Hairston told The Dispatch on Monday afternoon the increase in property values is “positive news” for the county.
“That is going to put us in a really good position as far as budgeting concerns. That increases the value of a mill,” he said.
District 3 Supervisor John Holliman, who is acting president of the board of supervisors, agreed. The revenue generated from the additional value, he told The Dispatch, could lead to a flat millage rate next year and fund more future projects.
“I don’t anticipate a tax increase,” Holliman said. “(The revenue) is actually going to mean a little bit more money in the general fund, and hopefully we can do some more projects and maybe do some more road work with it.”
City tax assessment value
Compared to the county, however, the city tends to lose out on that revenue, because industrial prospects are less incentivized to reside in the city due to its higher millage rate, Andrews said. The total millage rate within city limits is 154.33 (county, city and school taxes combined), which is almost twice the amount a company has to pay (88.26 mills combined for county and county school district) if located in the county outside the city limits.
“If I had a major company located somewhere in Lowndes County, I’m probably going to look at the county, not the city, because of that reason alone,” Andrews said.
The city’s assessed value for Fiscal Year 2020 is $194.8 million — a slight drop of roughly $39,000 compared to that of last year, Andrews said. The city’s school district, on the other hand, witnessed a slightly increased value from $215.3 million last year to $216.2 million this year, he said.
Leigh Mall, valued at $12.5 million in fiscal year 2019, was purchased by The Hull Group at $3.5 million — signifying a $9 million decrease in the property’s value, Andrews told The Dispatch. Only 14 tenants remain at the mall, which has a capacity for 36, he said.
Despite that loss, he said the city’s projected value is better than he had expected. It could mean that the city gained new retail stores while losing tenants at the mall, he said.
Mayor Robert Smith told The Dispatch in a Sunday text he and the city council are “elated” that The Hull Group purchased Leigh Mall in January. The lowered assessed value, he said, would help The Hull Group renovate the property and bring in new tenants.
Smith said he believes the city’s financial outlook is promising. The city budgeted for $7.7 million in property tax collections and has collected $7.3 million so far, he said, and Andrews’ office has hired an agency to collect past-due property tax revenues from the last seven years.
“I am confident that our finances are moving in a positive direction,” he wrote.
The rise and fall of assessed values also affect the value of a mill, which represents the expected revenue one mill can generate. Mills are used to calculate property taxes, and one mill equals $1 of property tax levied on $1,000 worth of assessed value. Each government entity multiplies the mill value by its millage rate to estimate the potential property tax revenue it will receive and plan accordingly.
The county’s mill value rose to $734,000 from $683,000 last year, he said. In Lowndes County School District, that number rose from $479,000 to $536,000 per mill. Due to a level city value, Andrews projects a $190,000-per-mill value in the city and $209,000 per mill in the school district — the same figures he recommended last year.
Pandemic ups chance of property tax defaults
Despite the better outlook, Andrews said the COVID-19 pandemic might lead to less property tax revenue than expected. More businesses could default property tax payments mid-year, he said, some of which have filed bankruptcy since the pandemic.
“You can get down to December 2020 or January 2021 and start seeing people not being able to pay their property taxes because of unfortunate circumstances that we have never seen,” he said.
The potential for a downturn in collections led Andrews to take a more conservative approach in assessing the county’s and the city’s mill values, he said. The mill value usually equals to .001 percent of the assessed value, Andrews said, but estimating a lower figure protects the entities from overspending their budget in case the revenue is not there. For example, he recommends that the county, which is valued at $749.7 million this year, adopt a mill value of $734,000.
“I’d rather have too much money at the end of the fiscal year than not enough,” he said. “I was more conservative this year than normal years because of (the pandemic).”
Yue Stella Yu was previously a reporter for The Dispatch.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 43 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.