Floyd County ‘max tax’ property tax collection could increase 23.9%

By Bob Steenson, bsteenson@charlescitypress.com

Floyd County Supervisors said they hope next fiscal year’s final tax rates won’t be quite that high, but the “max tax” amounts to be discussed at a public hearing later this month would allow an almost 24% increase in the property taxes collected in the two largest parts of the county budget.

The amount collected under the general services levy – paid by every property owner in the county, regardless of whether their property is in an incorporated city or in the rural part of the county – could go up more than 30%.

The additional amount of property taxes collected from just the rural areas of the county — through the rural services levy — could increase by more than 8%.

Under state law for the last couple of years, political bodies have to declare a maximum tax that they will be collecting in their main funds in the upcoming fiscal year, and then hold a public hearing regarding that amount. That’s in addition to the later public hearing required before the new fiscal year budget can be approved.

They can ultimately decide to collect less than the “max tax,” but once that amount is set they cannot collect more than that.

One of the main reasons the proposed county max tax is so high this year is because there was no county property tax increase last year on the general services or rural services parts of the county tax bill.

Because of an error in the maximum tax resolution last year that mistakenly repeated that year’s tax numbers instead of using the proposed new fiscal year 2021-22 numbers, the county collected more than a million dollars less for this current fiscal year than it had planned on.

The resolution with the wrong numbers was put together by County Auditor Gloria Carr and passed by the Board of Supervisors last year at this time.

Because of that reduction in the amount of taxes it could collect this current fiscal year, the county has had to dip deeply into its carry-over balance.

The county’s goal is to carry over 20% to 25% of its annual budget amount to get it through the first quarter of the new fiscal year before tax income starts coming in, and to have available in the case of emergencies.

Because the State Appeals Board ruled last year that the county could only collect the amount that was listed in the erroneous maximum tax resolution, the county’s estimated carry-over for the current year has been slashed.

With this year’s proposed maximum tax, that carry-over figure could grow back up to 20%, but supervisors discussed at their meeting this week keeping the actual tax collection lower than the maximum, resulting in about a 16% carryover.

The maximum tax proposal will be discussed at a public hearing to be held at 9:15 a.m. Monday, Feb. 28, at the courthouse.

The proposal would increase the maximum amount of taxes collected in the general services part of the tax bill from the current $4.854 million to $6.344 million, an increase of 30.69%.

The actual levy rate would increase by an even higher percentage, because the county’s total taxable valuation decreased this year.

The proposed general services levy would increase from the current $4.89764 per $1,000 of taxable valuation, to $6.52150 per $1,000.

The total amount that could be collected in the rural services part of the county tax bill would increase from the current $2.120 million to $2.296 million, an increase of 8.33%

The rural services levy rate could increase from the current $3.35706 per $1,000 of taxable valuation, to a maximum of $3.65750 per $1,000.

The general services and rural services parts of the county tax bill are not the total amount collected by the county. In addition there is a levy for debt service, to pay for the new county law enforcement center and updates to the courthouse, which Carr said will likely stay at or below $1.80 per $1,000 of taxable valuation, as well as levies for mental health and disabilities services.

And the county property taxes are only part of a property owner’s total tax bill. In addition there are the property taxes collected by the school district, community college and some small others. Property owners who have property in an incorporated city, such as Charles City, also pay city property taxes.

Not all of the proposed maximum Floyd County property tax increase would be just to increase the carry-over amount. There are also spending increases for most county departments, with a large share of that going to the cost of employee pay and benefits.

Most Floyd County employees will get a 5% pay increase on July 1, although some will get higher amounts. The county’s health insurance costs for employees are also increasing.

One of the largest department increases is for the Sheriff’s Department, which will increase by about $200,000 from the current year.

Part of that is caused by a 12% increase in the sheriff’s salary, from $92,596 to $103,709, driven by the state “Back the Blue” law that, among other things, requires that county compensation boards set the sheriff’s salary comparable to similar administrative positions in state law enforcement agencies and in cities of similar population size.

In Floyd County, sheriff’s deputies’ are paid a percentage of the sheriff’s pay, so they will also be getting 12% pay increases.