City tax increases are coupled with a reappraisal and utlility increases

Published 1:50 pm Friday, September 12, 2008

Millage in the city is expected to increase by about 3 percent when the City Council votes on a tax increase proposal on Monday, Sept. 15.

The council did not vote to implement the increase at Monday’s budget hearing as previously reported, but is set to vote on it at 6 p.m. Monday. The total proposed increase is 1.44 mills, not 1.66 mills.

That adjustment, if approved, could mean an increase in city taxes incurred on real property within the city limits. The Pearl River County Tax Assessor’s Office also accepted a reappraisal of personal property conducted this year, which means an increase on property taxes on average of all property within the county, including both cities.

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The value of a mill in the City of Picayune has increased as a result of the reappraisal. In 2007, a mill was worth $71,608,951. Now, in 2008, a mill is worth $81,418,068, according to documentation provided by the City of Picayune.

According to the documentation, the increase will mean the owner of a home valued at $100,000 can expect an increase of about $14 per year with homestead exemption. If that homeowner was paying $699.70 in annual city property taxes, then it will increase to $714.10. Without homestead exemption, the tax rate will be five percent higher, City Accountant Amber Hinton said.

City residents should keep in mind that they pay city, school district and county taxes. The previous figure was for city and school district taxes only. Information about county tax changes and other tax information is available at

The proposed budget for Picayune asks for a decrease in school millage of-3.33 mills, and an increase in city millage of 4.77 mills, making for a total increase in taxes of 1.44 mills. Total millage is proposed to increase from 84.97 mills to 86.41 mills. Even with the decrease in school taxes, the reappraisal conducted by the county Tax Assessor’s Office will enable the school district to collect about $1 million more in tax revenue than the previous year, said Interim City Manager Harvey Miller.

Proposed city millage increases will be used to pay for fire protection, to retire general obligation bonds and to pay for tax collection costs. The proposed increases include a fire protection millage increase of .25 mills, a general obligation increase of 3.92 mills and a tax collection increase of .59 mills.

The increase to the general obligation bond millage would be used to retire bonds taken out in previous years, said Priscilla Daniels, who will fill the city clerk’s position as of Oct. 1. Those increases were not implemented in previous years by the city council, so it is being done now. Daniels said using increased millage to pay off general obligation bonds is mandated by the state.

The addition of the tax collection millage will be used to pay the county for collecting the city’s taxes in the future. Miller said this new method of tax collection will not only free up city personnel but also make it easier for city residents to pay their city and county taxes, enabling them to do so with one stop instead of two.

Another factor city residents will have to consider as they budget for the coming year’s tax increases is a recent reappraisal of property in the county. That reappraisal was completed in July and public hearings were held in June and August. The appraisal goes into effect on the 2008 tax roll, said County Tax Assessor Gary Beech. On average, personal property values increased with the appraisal, which means county tax rates also will increase.

Using information gathered through the appraisal, real estate sales, type of building materials used in a structure’s construction and the structure’s square footage, a county establishes a tax index. Homeowners should expect an increase since the county’s index rose from 1.25 to 1.45 after the reappraisal.

The two increases, in the city and the county, amount to an average dollar amount increase of 14 percent in city taxes and 13 percent in county tax bills. Beech said there will be cases where some homeowners will see more of an increase while a small number may see a decrease.

Attributing causes of increases or decreases could be due to building material value adjustments and tax record corrections. Beech said some wood frame houses may have decreased in value causing a decrease in the home’s value. Increases and even decreases also could be attributed to the implementation of a more precise computer sketching program now utilized in the tax office. The program provides the office with accurate square footage of homes, attributing to some tax adjustments.

This could be a bad time for tax increases, especially since they are occurring both in the city and the county. Reappraisals take place every four years, Beech said. The next reappraisal was scheduled for 2010, but Hurricane Katrina moved the time table up by two years. Beech said in 2006 as the county was ready to wrap up their reappraisal, the state mandated another reappraisal be completed by 2008 due to damage, repairs and new construction after Katrina. The state’s reasoning was that repairs or damage to a home could have increased or decreased a home’s value, Beech said.

Now, the next scheduled appraisal will be in 2012, instead of 2010, Beech said.

With a rate increase on utilities and now an impending millage increase, Miller said the current perception is that the City of Picayune is going broke. He rebuts that, saying the city currently has about $68 million in fixed assets that can be sold to generate revenue if needed.

He praised the efforts and hard work of Hinton and Daniels, who he said are both wonderful employees and put many hours of hard work into the new budget.