MCSD board rejects administration’s recommendation, votes to roll back property taxes instead

After nearly two hours of discussion and debate – and three divisive votes – the Muscogee County School Board rejected the administration’s recommendation to keep the millage rate as previously set. The board instead voted to tentatively roll back the levy to give property owners a break in the wake of the Columbus Consolidated Government’s controversial revaluations, which have increased tax assessments on some parcels by as much as tenfold.

The new millage rate won’t be official until the board votes on its final adoption Sept. 12 at 9 a.m. That’s also the date and time of the third and final public hearing on this revised millage rate. The first two will be the same day, Sept. 5, first at noon then at 6 p.m.

Cathy Williams of District 7 made the prevailing motion, seconded by Mark Cantrell of District 6. Joining them in the 5-1 vote were board chairwoman Pat Hugley Green of District 1, vice chairwoman and countywide representative Kia Chambers and Naomi Buckner of District 4, who participated via phone. Laurie McRae of District 5 cast the lone no vote. Frank Myers of District 8 left the meeting before the votes were taken. John Thomas of District 2 and Vanessa Jackson of District 3 were absent.

The board’s action proposes rolling back the millage rate from 23.37 to 23.321 – amounting to a decrease of $250,204 in the local revenue the Muscogee County School District could receive.

But with the increased tax digest due to the higher property valuations, MCSD still would receive 13.02 percent more in local revenue in fiscal year 2018 ($119,081,812) than FY 2017 ($105,363,953), according to the figures the administration presented the board.

The fiscal year 2018 budget was projected to include $115,185,228 in local revenue out of $270,519,736 in total revenue and $288,819,039 in total expenditures and transfers when the board adopted it in June. But that was before this civic snafu stew simmered then boiled over the past two months.

The school board’s tentative rollback of the millage rate translates to a savings of only $1.79 on the property tax bill for the owner of a parcel with a homestead exemption and a fair market value of $125,000 and a savings of only $3.43 for non-homestead property with a fair market value of $175,000. So, amid the chaotic environment that has embroiled city government and school district officials with irate residents, the board’s action amounts to a symbolic move dripping with calculations as much political as they are fiscal.

To put Friday night’s decision in perspective, the board has kept the millage rate at 23.37 for 21 straight years.

Williams didn’t want to roll back the rate at all, and Cantrell wanted to roll it back even more – but they needed to come to some consensus with a deadline looming -- and seemingly everyone left the boardroom dissatisfied and frustrated with a conundrum not of their making.

Muscogee County School District superintendent David Lewis left the meeting immediately after it adjourned. Asked via email for his reaction to the board’s action, Lewis told the Ledger-Enquirer, “I am charged by the board to rebuild the fund balance that has been depleted during the austerity reductions of the past decade and budgeting for the projected increases in employee retirement and health benefits. My recommendation was consistent with those objectives. While it will be a challenge to meet the board's expectations, staff and I will address them as efficiently and effectively as possible.”

The called meeting was necessary, MCSD chief financial officer Theresa Thornton told the Ledger-Enquirer in an interview Thursday, because the district had just received from the Muscogee County Tax Commissioner’s Office updated information about projected revenue for FY 2018 due to the property revaluations.

Thornton wouldn’t say then how much the projected tax digest had increased, but she noted it is beyond the 3 percent threshold triggering the state law that requires the school board to conduct another round of advertisements and three public hearings before setting the fiscal year’s millage rate. For all those steps to be completed by the Oct. 1 deadline, Thornton said, the school board must meet as soon as possible.

So the board convened Friday at 5 p.m. to hear Thornton’s report and Lewis’ recommendation and decide whether to amend the 2018 millage rate.

Thornton told the board that even 30 minutes before the meeting she had received new projections from the tax commissioner’s office. The most recent estimate, Thornton said, is that the property tax digest will increase by 13 percent from 2017 to 2018 instead of the previously advertised increase of 1 percent because of the surge in property revaluations.

As she presented the board a range of options and their ramifications, Thornton explained that the state tax commissioner won’t accept the local tax digest if it varies by more than 3 percent from the advertised figure. That means, in this situation, MCSD can set a millage rate that would increase its local property tax revenue by as much as 13.26 percent (remaining at 23.37 mills) and no less than 10.26 percent (22.752 mills).

Myers challenged that assertion and asked board attorney Greg Ellington of Hall Booth Smith to cite the relevant state law. Ellington offered OCGA 48-5-32.1, subsection (e):

“The commissioner shall not accept a digest for review or issue an order authorizing the collection of taxes if the recommending authority or levying authority other than municipal governing authorities has established a millage rate that is in excess of the correct rollback without complying fully with the procedures required by this Code section. In the event a digest is not accepted for review by the commissioner pursuant to this subsection, it shall be accepted for review upon satisfactory submission by such authorities of such evidence. The levies of each of the levying authorities other than the county governing authority shall be invalid and unenforceable until such time as the provisions of this Code section have been met.”

That didn’t convince Myers, a lawyer himself, and he left the boardroom about midway through the two-hour meeting.

“I’m not going to participate in a vote that I think is constituting an illegal action,” Myers said, “and for that reason I’m going to excuse myself.”

Before he departed, Myers countered Williams, who had argued that rolling back the millage rate is too risky because thousands of property tax appeals are pending.

In the 21 years the MCSD board has maintained its millage rate, Williams said, “we have taken a beating at the state level. We’ve laid people off. We’ve closed schools. We’ve furloughed. … We have cut everything to accommodate, protecting our citizens against any millage rate increase, even though we could have increased the millage rate in order to offset some of these horrendous losses that we’ve incurred.”

Myers said, “The millage hasn’t changed in (21) years, Mrs. Williams, because it’s the third highest in the state of Georgia and there’s not much farther we can tax people.”

Beyond the tax numbers, Cantrell focused on the taxpayers.

“You have a lot of upset people out there with what goes on and what has happened,” Cantrell said. “… It’s a hornet’s nest.”

Making the matter more exasperating, board members said, is the changing information they are receiving from city and school district officials.

“We have no idea what we’re going to realize (in property tax revenue) with this mess going on with this revaluation,” Green said.

“I would never want to say we don’t need the money,” Chambers said. “I would never want to say we are taking money out of the classroom. If you gave us 10 million or 10 billion more dollars, I promise you we would find a way to spend that money on these children and it would be well spent. … It gives me pause that we having a 911 meeting because we found out new information just yesterday, and I do understand the urgency, and I do understand the law, and I do understand it is out of our control. … In my mind, it is like a tax increase I can’t in good conscience sign off on.”

Williams warned her fellow board members, “If you were to roll back taxes, then you’re going to be on the board that will increase taxes, because this is not a one-year thing, and it’s coming back to bite ya.”

Lewis reminded the board, “We are balancing this year’s budget using fund balance. … This is one of those aspects of leadership that sometimes is not pleasant, but if we’re going to be fiscally responsible for our employees and the system going forward, I think it’s imperative to consider those things before making any decision that has long-term consequences.”

Buckner said, “We respond to things as information changes.”

With just six of the nine board members participating in the meeting, only two opposing votes would block any motion from gaining the necessary minimum of five approving votes. And that’s what happened nearly 90 minutes into the meeting, when the board voted on the administration’s recommendation to maintain the millage rate at 23.37. Green, Chambers, Buckner and Williams voted yes; McRae and Cantrell voted no.

Chambers later asked to let the record reflect she intended to vote against the motion because she actually favors a rollback. “This has been the most confusing process,” she said.

McRae said she wants a “temporary rollback” -- which Williams pounced on with this retort: “That’s not how you vote. If you vote to roll back the property tax millage rate, that’s permanent until you vote to raise it.”

McRae replied, “I understand that, … but I decided to lower it because of all the uncertainty and the increased tax burden.”

Six minutes later, Cantrell made the following motion, seconded by Williams, who specified the numbers to resolve the stalemate: Rollback the millage rate to 23.321, which would generate a net increase in the property tax digest of 13.02 percent instead of the maximum 13.26 percent.

“I think there’s a safety factor in there,” Williams said. “I don’t think we’re going to get killed; I think that’s prudent. I mean, it helps the political expedience of being able to say, ‘I rolled back your taxes,’ but it doesn’t roll it back to a place where it risks our staff. So I will support that.”

Green said, “I can’t support that in good conscience, knowing that we already had a $19 million hole that we plugged up using our reserve.”

It took another 10 minutes of further contentions and questions before the board voted on Cantrell’s motion to roll back the millage rate to 23.321. It failed 4-2. Cantrell, Williams, Chambers and Buckner voted yes; Green and McRae voted no.

Buckner and Williams clarified their votes by saying it’s fiscally irresponsible to roll back the millage rate, but they voted for the motion to help the board meet the state’s deadline.

After a five-minute recess, Green announced, “For the sake of moving on, so that we don’t have to reconvene, I am not happy with lowering the mill rate, because we do have to operate our school system and maintain the integrity of our classrooms, (but) I will change and vote in the affirmative for the mill rate being lowered to 23.321.”

Williams made the motion, seconded by Cantrell. This time, the motion passed 5-1, with only McRae opposed.

McRae said, “I have not been confused. I think I have a very good grasp of what we’re supposed to do, but the numbers keep getting changed, and that is my frustration.”

This story was originally published August 25, 2017 at 9:19 PM with the headline "MCSD board rejects administration’s recommendation, votes to roll back property taxes instead."