If county and city officials don’t slash tax rates this fall, property owners could experience sticker shock when they get their tax bill.
Lowndes County Tax Assessor Greg Andrews estimates homeowners will pay 18% more in property taxes for 2024 if tax rates stay the same.
That would generate nearly $3 million in new tax revenue for the county and Columbus combined.
New values set by the Mississippi Department of Revenue for appraising building materials are driving the change, Andrews said, significantly ratcheting up home and commercial building values.
As the county and city have both started their budget processes for next fiscal year, which begins Oct. 1, they’ll be faced with pressing questions: Do they leave tax rates the same and pocket the new revenue? Do they lower rates enough to keep the tax burden essentially the same? Do they do something in between?
“My recommendation has always been this: If you need the money for projects that are legitimate, get it,” Andrews said. “… Otherwise, help the taxpayers out.”
Department of Revenue changes
The Department of Revenue updated its appraisal manual in 2021, Director of Real Property Amy Butler told The Dispatch on Wednesday.
That manual covers everything from a building’s base value per square foot, to the materials used in construction.
It accounts for the number of bathrooms, fireplaces, the roof, the cost of heating and cooling per square foot, among myriad other factors.
MDOR bases those values on the Marshall and Swift Cost Index, an international provider of building material data, and Butler said the state manual is meant to better reflect actual costs for construction in Mississippi.
“Most everything, on average, went up 20%,” Butler said of the 2021 adjustment.
MDOR adjusts its manual intermittently, with the previous manual update in 2010, Butler said. Once the manual updates, counties adopt the new rates on a prescribed cycle over four years. Lowndes and Clay counties are adopting them this year, while Butler said Oktibbeha and Noxubee counties will adopt them in 2026.
How does this affect property taxes?
Mills are used to measure property taxes. For example, a home valued at $100,000 would generate $10 in taxes per mill.
While higher property values raises the mill value – the overall amount of taxes 1 mill generates for a jurisdiction – county and city governments set mill rates, the number of mills it will charge taxpayers each year.
Andrews said in Lowndes County, a mill will generate roughly $43,000 more for 2024 than it did in 2023. Therefore, the 45.26 mills it assesses would generate an additional $1.96 million in taxes. The county could lower taxes by more than 2 mills this year and still collect roughly the same amount it did last year.
Likewise in Columbus, where the mill value is expected to jump $16,000, the 54.11 mills it collects would generate an additional $865,000 in taxes. The city’s tax rate could drop almost 4 mills in 2024 and collect the same amount as in 2023.
“In an update year, (cities and counties) should probably lower the millage rate, but that doesn’t normally happen,” Butler said.
For the schools, it’s a little different.
Increased mill values would generate $1.34 million more for Lowndes County School District and $1.2 million more for Columbus Municipal School District based on their current respective millage rates.
However, state law allows school districts to only request a 4% increase in operations funding plus the tax value of new property added to the rolls each year. That means the millage rate will almost certainly drop for those two districts from the previous year.
For example, Andrews said, even with the $36 million bond voters approved for CMSD facilities in May, the school district can drop its tax rate by about 3.5 mills, while still servicing its debt and maintaining its same level of operations funding.
What will Lowndes County and Columbus do?
For Trip Hairston, president for the Lowndes County Board of Supervisors, budgeting is a “balancing act.”
“We don’t budget up to what the millage will bring us,” he said. “We budget what the county needs and tax accordingly. … You owe it to the tax base to do those things that are simple blocking-and-tackling like paving roads, providing police protection and prosecuting things at the courthouse in the right way. But as a public official, you answer to the taxpayer, and you owe them (being) as efficient as you can be. You want to make sure you don’t have a bunch of slack in the budget and that you’re spending it appropriately.”
Still, he admits, the county could use the new money, especially as inflation impacts its own costs to do business.
He cited rising vehicle maintenance and equipment purchase costs, specifically noting the county’s need for a paving machine, which could run between $350,000 and $400,000. Record asphalt prices have dropped some lately, Hairston said, but they are still higher than four years ago.
Then there’s the increased pressure to raise wages to recruit and retain quality employees, Hairston said.
“That always needs to be looked at, in my opinion,” Hairston said. “When you have a thriving economy in your own county, you’re going to have wage pressures. … You want the best people in the job because you want your best foot forward. … Wage inflation is a real deal. You can’t just roll over and shrug it off. You’ve got to stay on top of it.”
In Columbus, Mayor Keith Gaskin continues to push for building a capital fund for infrastructure projects. Additional property tax funds could also help pay down the city’s nearly $30 million of debt faster, accommodate employee salary raises and address technology and equipment needs.
Ultimately, Gaskin said, the goal is to improve city quality of life.
“It’s not inexpensive to have a good quality of life within a community,” he said.
Cutting taxes is certainly an option, he added, though citizens need to know exactly what their tax money would pay for, as well as what a tax cut would keep the city from providing.
“Any time there’s an opportunity to give citizens relief of a tax burden, you need to take a serious look at that. But you also have to show them what that means,” Gaskin said. “It would be very easy from a political standpoint, especially going into (an election year), to throw out what you think citizens might like to hear. … We need to study it closely. We need to debate it. And we need to hear from citizens.”
Zack Plair is the managing editor 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 26 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
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 26 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
