Tornado a serious blow to county's revenue stream

The full impact of April's tornado on Catoosa County taxes remains unknown, but officials expect it to be substantial.

Substantial, but not necessarily as devastating to budgets as it was to properties.

During last week's county commission meeting, chief financial officer Carl Henson painted a rosy picture for the first eight months of the current fiscal year.

"Revenue is about 7.7 percent better for the 12-month period 9April-April) and a little more than that for compared to the prior year," he said.

The caveat was that revenue reported for May is for collections through April.

"Right now, the revenue [from sales tax collections] we've received is only through April," Commission Chairman Keith Greene said. "The storm's impact is not figured in."

Sales taxes could not be collected from businesses forced to close due to damage or during the days when Ringgold was cordoned off while crews cleared streets and worked to restore utility services.

Lost revenue might be made up by high volume - and high dollar - sales directly related to ongoing recovery efforts.

"I'm projecting that the rebuild will offset losses," Henson said.

Greene said he was optimistic about a revenue rebound, particularly if building materials are purchased locally.

While the tornado destroyed many fast food restaurants and convenience stores, travelers on Interstate 75 have and will continue to use the surviving businesses along Alabama Highway as a place to refuel.

"We may not see the loss as much as we first thought," Greene said.

In addition to impacting sales tax collections, the county definitely will lose revenue from properties that are taken off the tax rolls.

Dale McCurdy, the county's chief appraiser, told commissioners that about 80 homes and 20 businesses destroyed by the storm will no longer be billed at pre-tornado amounts. The property taxes will be levied only on the land's value and not on the destroyed buildings.

In the immediate aftermath of the tornado, McCurdy estimated about $22 million in property damages would translate to about a 5 percent reduction in the county's tax digest.

But several other factors must be considered along with the storm when projecting property tax collections for the coming year, he said.

At the beginning of the recession, state legislators set a moratorium on appraisals - they could be lower but not raised, McCurdy said.

Roughly 30 percent of all property is reassessed each year and declining home prices, something that has been most affected by foreclosures, will be reflected in tax bills.

When tax notices are mailed in the coming weeks, property owners may notice the forms look different - a uniform form is being introduced statewide this year - but most will find their assessments to be about the same.

Not now but in years to come, the tax digest may increase as Ringgold's recovery includes rebuilding with bigger, better - and more valuable - homes and businesses.

Clearing debris to allow recovery and rebuilding is also costing the county. Cleanup costs may total between $4 million and $5 million, according to Greene.

Of that, the Federal Emergency Management Agency will reimburse the county for 75 percent of the total and the state might contribute up to 15 percent. That means in a best case scenario the county will pay at least 10 percent of the cost to pickup, haul and dispose of storm-related debris.

"We are fortunate that the county has a reserve fund," Greene said.

Upcoming Events