Walker County announces plans for property tax increase, budget cuts

Walker County officials have announced three public hearings to discuss a proposed property tax increase for the upcoming fiscal year, as well as potential cuts to the budget.

Sole County Commissioner Shannon Whitfield said he is moving forward with a property tax increase of 2 mills in the unincorporated parts of the county and 2.189 mills in the incorporated areas. For a home with a fair market value of $100,000, that would equate to $76 in the unincorporated locations and $83.18 in the incorporated areas, Whitfield said.

The increase is necessary in order to fulfill obligations to the Bank of Lafayette and First Volunteer Bank, from which the county had to borrow $4 million each in the form of a tax anticipation note, or TAN, to make payroll for the year. In order to be able to borrow the TANs, Whitfield said the county had to make commitments to both banks to increase revenue by at least $2 million in the next budget cycle.

The property tax increase should bring in about $2.5 million to the county in the upcoming fiscal year, Whitfield said,allowing the county to meet its obligations to the banks while increasing annual revenues.

"Our goal is to get out of the TAN business altogether," said Whitfield. "We'll be $2 million less dependent on TANs next year, so we'll only have to borrow $6 million, and we'll reduce that by $2 million a year. TANs are very expensive - they're basically payday lending for governments."

In addition to the $8 million the county will have to pay back to the banks by Dec. 30, Whitfield said the county will accrue about $250,000 in interest on the TANs, something he's eager to be rid of.

"The TANs are needed because we have a $7.5 million negative net position we inherited from the previous administration," Whitfield said. "It's like we're $7.5 million overdrawn on our checking accounts."

The property tax increase will come in tandem with potential budget cuts. The county has already cut $1.3 million in annual operating costs from personnel alone, in the form of 26 removed positions that Whitfield described as "middle management." Whitfield said he's hopeful to make that figure $2 million by the time the budget is passed.

"We're going to try to maintain all our services. We're just asking our departments to operate more efficiently and as conservatively as possible," Whitfield said.

The county could have moved to increase the property tax by a larger percentage, but Whitfield said he felt the proposed increase fit into his four-year plan of eventually not having to take out TANs to make payroll, and was more palatable.

"I felt comfortable with those numbers being attainable and being reasonable to the citizens," Whitfield said. "We need the support of our citizens to understand that we're making progress and we have to have some increases, but we'll be cutting expenses at the same time."

The county has no reserves or emergency funds, and Whitfield said they are operating day-to-day on borrowed money. He met roughly six weeks ago with the state Treasury Department, Department of Community Affairs and Department of Revenue in meetings set up by state Sen. Jeff Mullis to inquire about the possibility of help or assistance from the state. But Whitfield said the state officials didn't have anything to offer Walker County financially.

"They were good meetings; we made some good contacts. But there wasn't anything that the state had at the department level that they could do," said Whitfield. "At this time, we've been having to fend for ourselves and work hard to cut expenses."

Counties in Georgia cannot legally declare bankruptcy. If they could, Whitfield said Walker County would have already declared bankruptcy to reorganize their debts.

Email Shane Foley at sfoley@timesfreepress.com.