Commissioners debate modest property-tax increase to stop fund-balance decline

Coffee County commissioners spent a substantial portion of the May 28 Budget & Finance meeting debating whether to raise the county property-tax rate by a small amount to halt recurring draws on the unassigned fund balance.

A commission leader described the fiscal situation bluntly and urged action: "Each year we're sitting here looking how we're going to cover 600...we are bleeding out money," the chair said, summarizing a recurring pattern of using fund balance to cover annual shortfalls. Finance staff presented modeling showing that a countywide 2% salary increase would cost roughly $329,841 and a 3% increase roughly $494,762; staff estimated the committee’s current package would leave an approximate $1.9 million deficit under some scenarios.

Commissioners discussed potential incremental tax-rate options as an alternative to further depleting reserves. Staff estimated that one penny of the tax rate, at current enrollment and valuation assumptions, is worth roughly $167,800; commissioners observed that a six-cent increase could generate on the order of $1 million in revenue and materially rebuild reserves. Several members emphasized the importance of waiting for the assessor’s certified uniform rate and exact penny valuation before committing to a millage change. "We need to know what that number is so you know what the pennies are going to raise," a finance staff member said.

No vote on a tax-rate increase was taken. The committee directed staff to return certified assessment figures and scheduled follow-up meetings (June 4 and, if necessary, June 9) so the full commission can act with accurate revenue estimates.

Context and next steps: County staff stressed the reassessment and appeal process must finish before commissioners can reliably calculate revenue from any proposed rate change. Commissioners signaled openness to modest, recurring increases rather than a single large jump and asked staff to model 2–6 cent scenarios using certified assessment values.

Reporting note: Commissioners and staff discussed multiple formulae and possible penny values during the meeting; the committee deferred any final tax-rate action until the assessor provides certified valuation and the county computes the exact revenue yield.