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I remember a time in Facebook world when someone would post their relationship status as “it’s complicated.” That may still be an option, I try not to spend too much time browsing such mindless matters. But I thought about that status when I was trying to figure out how to explain the county budget.
After covering over two decades of budget cycles, it seems like it doesn’t get easier to explain. Let’s start with the millage rate, a numerical multiplier attached to the value of property that is used to calculate property taxes. One mill is equivalent to one dollar paid $1,000 of the property’s assessed value. Local taxing authorities including city aldermen, school trustees and county supervisors must adjust millage rates annually to support the expenses for government.
The millage rate is calculated by determining the assessed value within each jurisdiction. The budget process starts each July as Yalobusha County Tax Assessor/Collector Linda Shuffield presents the tax rolls to county supervisors. Her information provides the taxable value for automobile tags, the mobile home roll, the public utilities roll, the personal roll and the land roll.
In accordance with state statute, supervisors then adopt an order opening the real and personal property rolls for inspection and examination by the public. This is the window to object to the assessed value, or tax value, that is calculated for property. Objections must be filed with the clerk of the Board of Supervisors before July 31 each year.
Meanwhile supervisors use Shuffield’s figures in subsequent meetings to calculate the millage rate based on the budgeted expenses for the coming fiscal year. This process is finalized each year during September with a public hearing on the proposed budget, followed by the adoption of the budget for the fiscal year that begins on October 1.
The annual tax levy imposed by supervisors also includes the amount requested for schools in a similar budget process. A significant portion of your taxes funds education.
Sounds simple so far, but the devil is in the details. For example, you may wonder why you pay more property taxes on your house this year if the county’s tax rate remained unchanged. The reason, the tax assessment on your home may have increased due to rising home values. Think about it, during an inflationary period property values typically increase.
How about vehicle license tags. The cost of a license plate is computed based on the VIN number from your vehicle that is entered into the computer at the tax office, which pulls the value from the State Tax Commission based on the suggested retail price. This amount is multiplied times the millage rate, less the Legislative Tag Credit you receive in Mississippi when you purchase or renew your plate.
The Legislative Tag Credit was granted by the Mississippi Legislature in 1994, and the percentage or credit can change each year as set by the Mississippi State Tax Commission. Starting in July, the Legislative Tax Credit increased from 6.5 percent to 8.75 percent. That means you will pay less money for license tags until June 30, 2023. This is worth a little figuring, as even if the county’s tax rate is the same for the coming year, you will pay less.
But what about the revenue needed to fund county operations? If vehicle owners pay less for vehicle tags, where does the deficient come from? The Legislature created a fund to reimburse local governments for this tax loss called the Motor Vehicle Ad Valorem Tax Reduction Fund. The fund’s revenue comes from sales tax collected on the purchase of motor vehicles.
The fund fluctuates each year, which means the tag credit for vehicle owners also fluctuates, which means what you pay for the same vehicle tag also can change. That gets complicated – people may think county taxes increased or decreased based on the cost of their license tag, but in reality other variables also factor in.
I hope all this is clear as… Well let’s just say if you have questions about the county’s proposed budget and tax levy, head over to the Coffeeville courthouse Thursday morning at 9 a.m. This meeting is a public hearing for comments or questions. And I will add that in all my years of covering government and budgets, few people attend public hearings on such important matters. This is your opportunity to ask questions.