Sumter homeowners will see an increase in their property taxes after a comparable decrease the last two years after the school board unanimously voted to reinstate 10 mills on one side of its budget Monday.
District Chief Financial Officer …
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District Chief Financial Officer Jennifer Miller and Sumter School District's Board of Trustees discussed the scenario Monday night at the board's regularly scheduled monthly meeting, and The Sumter Item tried to follow up with county officials Tuesday.
During the last two fiscal years, the district - with the assistance of its tax attorneys -- implemented a "millage rate swap" mechanism that removed 10 mills from the debt side of its budget and transferred it to the operations side. A millage rate is what's used to calculate property taxes.
With the change, it reduced property taxes on owner-occupied homes for all homeowners in the county because they only pay for the debt side.
The increase of 10 mills on the schools' operations side was covered by the state for owner-occupied property through Act 388 from about a decade ago; so local residents didn't pay for that. Taxes didn't change for any other properties, to include commercial, rental and automobiles, because while businesses and rental property owners pay on both the debt and operational sides, it was a wash for them with the addition of 10 mills on one side and the reduction of 10 mills on the other.
Originally, in the fall of 2017, the district thought it would be able to do the swap just one time, but in the end it was able to do it again in fall 2018.
"For the past two years, homeowners on average on a $100,000 property saved $60 each year; so, they saved $120 over the last two years," Miller said.
The district was allowed by state law to do the millage rate swap because of its net $4.3 million deficit from fiscal 2016.
To keep receiving 10 mills' worth of tax revenue, they moved it back to the debt side because the state is no longer allowing the swap because there is no more deficit. The deficit that was revealed due to $6.2 million in overspending in fiscal year 2016 had brought the district's fund balance down to $106,449. After budget cuts and closing two schools, it is now projected to be $11.5 million.
The district tried to increase the millage rate by 9.01 mills on the operations side earlier this summer, which would not have affected homeowners. Sumter County Council denied the request, the third year in a row they have done so.
Though there was a tax savings for homeowners, the wording of the tax bills has caused confusion for those two years, according to Area 4 Trustee Johnny Hilton and others.
The bills' wording stated a one-time deficit reduction and an additional 10 mills added for operations, according to Sumter County Assessor Jimmy Barfield.
Barfield told The Sumter Item on Tuesday he never liked the wording.
"I don't understand it, and I fussed with them when they put that wording on it," Barfield said. "This is a 'one-time deficit reduction.' It didn't sound good, and then they did it more than one year, because everybody thought it was going to be a one-year thing."
Barfield said the jargon didn't tell a regular taxpayer anything.
"Telling them there is an 'additional 10 mills added for operations,' that doesn't tell anybody what their taxes are," Barfield said. "Most people wouldn't have known that by going to operations instead of the debt, that meant that the extra 10 mills would be paid and offset by the state. The average homeowner would not know that."
The Sumter Item asked Sumter County Auditor Lauretha McCants who advised her to write that wording. She said then-district CFO Chris Griner advised her on the wording when the tax swap was initiated. Griner served as the district's CFO from July 2017 to May 2018.
McCants said "one-time school deficit" was changed to "school deficit" on tax bills in the second year of the swap.
With the board's decision to reinstate the 10 mills on the debt side, Miller and Hilton said, homeowners will see their tax rate back up to what it was three years ago.
"Some people are going to say, 'My taxes went up by 10 mills,' and that is true," Hilton said. "But, they went down by 10 mills for two consecutive years. So, now, we are moving it back from the operations side to the debt side. We need people in this community to help us help everybody in the community understand."
- The board unanimously approved the district's personnel report and minority business utilization plan.
- Administrator Brenda Hafner assumed a new position title during the summer as the district's chief of schools. Hafner previously held the title of assistant superintendent for leadership and school excellence.
In the post, she has responsibilities with all principals and school leadership and daily school operations to include instruction and discipline.
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