The Mississippi Department of Revenue adjusts its appraisal manual once a decade or so, which probably doesn’t pique the typical homeowner’s interest.
The manuals most people are familiar with deal with appliances or other purchases and are tucked away, mostly forgotten, in a drawer somewhere.
The Department of Revenue’s appraisal manual is quite different. The manual contains costs per square foot for various types of structures. Building a 20 foot by 20 foot warehouse out of metal framing, walls and roof? The manual will have a price per square foot that tax assessors can use to apply a value to the building.
The DOR’s manual was updated in 2021 and is being phased in over a four-year interval. The new appraisals will go into effect in Lowndes and Clay Counties in 2025 for the year that begins Oct. 1. Oktibbeha and Noxubee counties will be subject to the new appraisal formula in 2026.
In Lowndes County and Columbus, the new appraisals are expected to increase taxes by 18-to-20 percent if city and county officials keep the millage where it is now. As both local governments begin the budgeting process, what they do with the millage will be an important consideration. Left as it is, the new appraisals would generate a combined $3 million annually, which presents these elected officials with an interesting scenario.
No elected official of sound mind would dare raise property taxes by 18-to-20%. It’s hard to even imagine a scenario where that sort of tax hike would be justified. Yet in this case, those leaders could raise taxes by that much without lifting a finger, simply by leaving the millage rate as it is.
For property owners, the new appraisal formula is both a blessing and a curse. On one hand, it means the value of a person’s property has increased. On the other hand, it means taxes based on that appraisal will increase unless local governments cut the millage rates.
The increase in the appraisal formula tells us what we all already know: The cost of building materials has been going up for years. The new appraisals reflect those higher costs.
That’s something our elected officials will also have to weigh as they set millage rates. Maintenance and other costs are likely to go up, too.
Leave the millage as is, and it’s a windfall for local governments. However, reducing the millage to the point where homeowners won’t see an increase in their tax bill may not reflect the true costs of providing services.
The best solution, especially in Columbus where there is already an $18 million budget surplus, is to return the majority of those extra funds to the property owner by reducing the millage to something very close to the amount those citizens are already paying.
There has always been an understanding that local governments will ask citizens to fund only what is needed to maintain services or, in some cases, for a special non-recurring circumstance. Local officials are wise to honor that agreement, understanding that unforeseen circumstances may require tax increases. Property owners are more supportive of tax increases when local governments have a history of keeping taxes as low as can be reasonably expected.
Lowndes County and Columbus will have to make their decisions about how to respond to the new appraisals within a few short months. Local governments in Oktibbeha and Noxubee counties have more time to evaluate the situation.
Property owners, municipalities and counties throughout the state should give some thought to the matter. Is this an opportunity to expand services? Or is it better to keep the actual taxes as close to where they are as possible?
It’s your money, after all, so you have every right to let your supervisors and council members know where you stand on the matter.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
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