Tax confusion impedes new police station

August 4, 2011

By STEVEN NALLEY
citybeat@bellsouth.net

The Starkville Board of Aldermen voted to table adoption of a master plan for new and improved municipal facilities when questions arose about the structure of tax increases in the plan’s bond issue.
When Ward 5 Alderman Jeremiah Dumas gave a presentation on the master plan, millage increases for the second phase appeared to be higher than those of the first phase. After Dumas made several efforts to clarify the math behind these millages, Mayor Parker Wiseman suggested the measure be tabled, and after some discussion, the board agreed. The board will discuss the plans again at their next meeting Aug. 16.
The decision to table the measure, in turn, raised questions about whether the city would still be able to hold the bond issue vote in accordance with the U.S. Department of Justice’s timetables for approving special votes as outlined in the 1965 Voting Rights Act. Initially, the master plan called for a bond issue vote on Sept. 27.
For about 18 months, the Board of Aldermen has worked to find a solution that would give city police and other city officials more adequate facilities for their work. The result was a master plan for a new police facility at the corner of Highway 182 and Jackson Street and an annex and renovation for the current City Hall. The plan was presented by the citizens’ municipal complex committee at a special town hall meeting July 12.
At Tuesday’s meeting, Ward 5 Alderman Jeremiah Dumas’ presentation, he said, largely echoed that of the citizens’ committee.
Several subsequent items on the agenda were contingent on the master plan’s passage Tuesday evening, including an item calling for a public vote on a bond issue to pay for the municipal complex.
Following the tabling of the master plan, most of the contingent items were rendered moot. The only exception was a contract with architect Gary Shafer to start developing renderings of the master plan for no more than $3,000.
The issue that prevented the plan’s passage arose when Dumas discussed the mill increases within the bond issue.
A mill is a property tax, calculated as $1 of annual taxes for every $1,000 of a property’s assessed value. Assessed value varies depending on the use of property, but Dumas’s millage examples dealt exclusively with homes, which are assessed at a 10 percent rate. Therefore, for example, a $100,000 home would be taxed at $10 per mill.
Dumas’s presentation showed a mill increase of 3.49 mills to pay for the project’s first phase, construction of the $8,455,000 police department. It also showed an increase of 2.46 mills to pay for the second phase, the improvements to city hall.
To show the project’s impact on tax payments, Dumas included tables in the presentation that showed how much annual taxes would increase for homes of varying values. For instance, he said, the mill increase for the first phase would leave owners of $300,000 homes paying $104.70 more in property taxes per year, $8.73 more per month, and 28 cents per day.
Dumas’s table for phase two showed a tax increase of $180.30 for owners of $300,000 homes, despite phase two’s lower cost and lower millage rate. Ward 3 Alderman Eric Parker asked if the $180.30 was cumulative, a combination of the $104.70 and an unseen, un-isolated phase two increase. Ward 2 Alderman Sandra Sistrunk and Starkville Mayor Parker Wiseman raised similar questions.
Dumas said while the two tax increases would be active simultaneously, $180.30 was not a total. It was an additional increase, he said, bringing the total tax increase for owners of $300,000 homes to $285.
“The confusing aspect of this is that you’re multiplying by a higher percentage of mill rate,” Dumas said. “I promise you I can show you the details of this through the spreadsheets. Because it is confusing that you’re raising a higher percentage, but your multiplication factor is 25.49 mills versus 23.49 mills.”
Dumas continued to field several questions from members of the board. He said while it was important to examine all millage increases at this stage, the phase two millage increases were “highly variable.”
“It is interesting when you look at a lower increase of millage rate from what we did with phase one, but your multiplication factor is a higher percentage,” Dumas said. “You’re going from a higher number to an even higher number, and believe me, we went around and around on that ourselves, in trying to figure that out.”
Dumas was able to finish his presentation with a timeline for each phase. Phase one’s timeline, assuming the master plan’s approval that night, called for construction of the new police station to start in July 2012 and finish July 2013. Phase two’s timeline had no specific dates, because no start date was set. Sistrunk said it was important to assume that no work on phase two would start until after phase one was finished.
“Just from the mechanics of staging the moving of 300 employees out of this building, to be able to take the police force out before we start phase two makes all the mechanics of removing the city staff while you’re doing the renovation much more achievable,” Sistrunk said. “While I personally would like to see us move forward with both projects at the same time, it is incredibly difficult and I recognize the difficulty, not just from the funding side of it, but from the mechanics of moving that many people during the construction process. I think that’s why phase two is more loosely presented than phase one.”
As soon as Dumas finished his presentation, questions about the millage increases resumed. Eventually, Wiseman proposed that the measure be tabled.
“I think those tax numbers do need to be clarified in the master plan, and before I say that, let me first say, Alderman Dumas, you did an excellent job in preparing the master plan and organizing all the work that had been done by the board committee, by the citizens’ committee,” Wiseman said. “I think it is a document that is 95 percent ready to go. However, before we adopt a document that is going to have such a lasting implication, I think that issue needs to be clarified.”
Dumas agreed it would be best to meet with the board members outside the context of regular meetings to explain the math behind the millage increases instead of prolonging Tuesday’s meeting.
One of the elements of Dumas’s timeline was a vote on the bond issue Sept. 27. City Attorney Chris Latimer asked if there was a particular reason to stick to that date, and Wiseman said delaying the vote until October cuts too close to the November elections and their extensive campaigns, dividing voters’ attentions.
“After you pass Sept. 27, that is a real mile marker for the general elections for state and county offices,” Wiseman said. “A goal of putting this issue on a ballot in September is that tends to be a dead period in the general election campaign. I just fear if you have all that going on at once, it’s potentially problematic.”
Latimer then said too little time between the master plan’s approval and the bond issue vote could create legal problems.
The Civil Rights Act of 1965 requires governments in several states with histories of discrimination at the ballot box, including Mississippi, to obtain approval from the U.S. Department of Justice, called “preclearance,” before changing any voting procedures. Once a request is sent, the department has 60 days to respond.
“The election often beats that 60 days,” Latimer said. “That’s why the term ‘post-preclearance’ comes into play. As a practical matter, the Department of Justice often gives the municipality guidance in the process about whether there’s a problem or not. If they say there’s not a problem, the election goes forward, preclearance comes in the back end and everything’s okay.”