Jackson County officials are bracing for more severe budget challenges amid speculation that the property tax digest for Jackson County could dip by 10-20 percent following reassessments this year.
“Right now it’s really tentative,” noted Hunter Bicknell, chairman of the Jackson County Board of Commissioners. “There’s been a little work trying to estimate it and it looks like somewhere as much as 10 percent shrinkage for the coming year.”
“Jackson County’s tax assessors are reassessing all residential and agricultural land in the county,” reports John Hulsey, the county’s finance director. “The worst-case scenario we’re planning for is a 20-percent decline in the value of land alone, not counting the improvements (houses, etc.).”
That works out to about $920,000 less revenue than this year — just for the land.
“That’s a dramatic decrease,” Hulsey notes. “Couple that with whatever loss there is on improvement values, and it will have a significant impact. Last year the digest fell five percent.”
As tough as it will be for Jackson County to absorb a 10-percent reduction, the situation is far worse for the county school system.
“If there is a 10-percent reduction, which is a definite possibility, the school system’s one mill would be reduced by about $162,000,” said Jackson County School System’s assistant superintendent for finance and information services, Jeff Sanchez, in an e-mail response to an inquiry. “The total loss would be somewhere around $3,076,836.”
“That’s huge,” commented Shannon Adams, superintendent of the Jackson County School System. “I hope they’re mistaken about it. If it’s true, it’s going to be a real disaster.”
If it happens, said Adams, the system will have no choice but to implement its third reduction in force (RIF – layoffs) in four years.
“If the county digest comes in like that, we will have to cut people,” he stated. “This is terrible news.”
Complicating the matter is that school systems are supposed to have their teachers under contract by May 15, but the tax digest won’t be finalized until mid-summer.
Already, the tax assessors have some 3,000 returns contesting current assessments. After the new tax assessment notices go out in June, taxpayers will have 45 days to appeal the new values. New law requires the assessors to consider foreclosure sales in establishing the value of property, and those values will affect surrounding property values as well.
This year, all taxpayers will receive an assessment notice, whereas in the past, such notices were sent only when there were changes. In addition, the notice will include an estimated tax bill — based on last year’s tax rate. There are 33,000 parcels in Jackson County.
Since payroll amounts for about 90 percent of the school system’s spending, it’s hard to imagine the system being able to absorb $3 million in revenue reductions without affecting personnel — particularly since the system has already trimmed its school year by eight days
.
“Tax increases are definitely out of the question,” Sanchez said. “We’ll have to look at both state and local funding.”
“We will be very austere with supplies again this year,” said Adams. “We’re not adopting any new textbooks.”
And while the contracts stipulate that the fulfillment of the contract by the local school board is contingent upon state money, Adams says there is nothing in teacher contracts giving school systems an out if local funds come up short.
Adams pointed out that the reduction in state funding for the 2011-12 school year — $125,000 — is “not really that bad,” compared to previous cuts. Were the tax digest to remain unchanged, he said, the schools’ finances would be in better shape than this time last year.
For years, local governments counted on increasing property values to provide new revenue needed to accommodate the needs of a fast growing county. That ended with the housing crash, and with property values plummeting, property tax revenue is falling too — but not the cost of providing schools and government services and of retiring public debt.
“We’re going to have to educate the public because there is a cost of providing government service,” Hulsey said. He pointed to the millions of dollars worth of roads and other infrastructure developers deeded over to the county during the boom years. “There is a cost of maintaining public infrastructure,” he added.
The growth attendant to the housing boom increased the cost of operating county schools and government. The county must maintain its jail and court services, maintain and repair roads, bridges and ball fields, and keep all of the vital records intact for what is still one of the fastest-growing counties in America. If there is a call for lower taxes, there is no outcry for reduced public services, and those children who moved into the county during the boom years are still going to school.
“We had about 350 more children the first day of school this year than last year,” Adams pointed out.
