Glynn County officials had to work around a drop in taxes for residents of the city of Brunswick and Jekyll Island when preparing the next fiscal year’s budget.
Due to a number of changes between this year’s budget and the recommended budget for the next fiscal year, it’s difficult to compare them directly, County Manager Alan Ours told the Glynn County Commission at a Tuesday work session. However, the total budget for the last fiscal year added up to around $142 million while the 2019-2020 budget comes out to around $132 million.
The $10 million difference can largely be attributed to fewer purchases and the expected drop in revenue from Brunswick and Jekyll Island, according to Tamara Munson, the county’s interim chief financial officer.
Property tax revenue remains stable, Ours said Tuesday, but fewer expenditures are planned for the next fiscal year.
A decision in a class-action lawsuit against the county over improperly-applied Scarlet Williams homestead exemptions will impact the county in some way, but the extent is not yet known, Munson said.
“The decision is impacting property taxable assessed values in the county but the total dollar value of that impact has not been determined. The county did see growth in the digest this year of approximately (four percent), even after changes in property values due to the Coleman decision,” Munson explained in an email sent Thursday.
Of the changes in next year’s recommended budget, the largest difference can be found in the general fund, one of six funds composing the entire budget. It would drop roughly $8.5 million to accommodate for new police and EMS taxes.
When deciding in 2008 which government entities would offer which services, the city of Brunswick and the county decided to levy a countywide tax for the Glynn County Police Department. While he couldn’t say exactly why the decision was originally made, Ours said the city has since indicated it doesn’t want to pay the tax anymore.
“In 1998, the county entered into its first service delivery agreement with the city of Brunswick ... it required cities and counties to come together and agree on how services would be provided and who would fund the services,” Ours explained Tuesday. “At that time — and again in 2008 because the agreement has to be renewed every 10 years, which is tied to the comprehensive plan — the city agreed that the county would charge a county-wide millage for the police department.
“However last year, when we met with the city to discuss the renewing of the service delivery strategy ... Mayor Harvey said we’re not in agreement with this anymore, and we don’t believe city residents should be paying for county police.”
Instead of allotting taxes from the general fund to the police department and EMS, two new taxes would be created to pay for them at 0.68 mils for EMS and 1.84 mils for the police. To compensate, the county’s primary source of revenue — the maintenance and operations tax — would drop by an equivalent amount, going from 7.383 mils to 4.863.
Most county residents won’t see much of a difference in their property tax bills, but those that live in Brunswick and on Jekyll Island will see a drop in taxes as a result. The police tax won’t apply to the city while Jekyll residents would pay neither, but still enjoy the benefits of the decreased maintenance and operations tax.
Jekyll Island residents will no longer receive a credit on their insurance premium tax to compensate, however.
Overall, the lower tax rate will lead to a roughly $500,000 decrease in taxes from the city, $330,000 from Jekyll Island residents, Munson said at the county commission’s Tuesday work session.
Without that money from the city and Jekyll Island, the county has had to rearrange its budget and tax structure to fund the police department.
It created a new police fund where money from the new police tax will feed. Revenue from the insurance premium tax — which once went to the Glynn County Fire Department — will now help cover the department’s $12.3 million budget.
Diverting premium tax revenue from the fire department to the police will have consequences the county commission will need to deal with down the road, Munson said. This year, the fire department will cover the gap in its budget from its own pocket. Moving forward, Munson said in the email that the county commission will have to figure out how to deal with the shortfall in the long term.
“This will be a (commission) decision and discussion that will be taking place in the future. Most of the shortfall is the debt payments for the firetrucks and some discussion is ongoing about paying off some debt with fund balance, but that is a (commission) decision that will have to be made,” Munson said in the email.
The new tax structure, rearranged funds and revenue destinations and a change in the county’s financial reporting software will make it more difficult to draw direct comparisons between budgets created before and after the fiscal year 2019-2020.
“It’s very difficult to compare the FY20 budget to the FY19 budget because of these factors,“ Ours said Tuesday.
Among expenditures budgeted for the next year is $200,000 set aside for special projects related to the comprehensive plan.
The money will be used for a number of things, mostly dealing with the county’s Community Development Department: ordinance changes, code revisions and to hire planning firm Ross and Associates to do an impact fee study and potentially help implement a fee as well.
Another significant difference between this year’s budget and the recommended budget for next year is a drop in the county’s capital projects fund.
“In prior years, the general fund made significant contributions to the capital projects fund to fund county-wide projects, however, the revenue was not available this year due to other increasing costs and there was no transfer from the general fund to the capital projects fund for FY20. Also, police and EMS capital are shown in their individual funds rather than the capital projects fund,” Munson said in an email.
Also in next year’s budget, the county is looking to replace 24 vehicles, including the fire department battalion chief’s vehicle, 10 Dodge Charger pursuit cars for the police department, seven patrol vehicles for the Glynn County Sheriff’s Office, two new ambulances and a half-ton pickup truck, among others.
The price for vehicles listed comes out to around $1.2 million, not including a second half-ton truck that had no estimated cost listed.
The full recommended budget for the 2019-2020 fiscal year can be found on the county’s website at glynncounty.org/civicalerts.
Looking forward, Ours said Tuesday that there’s a general belief among economists that the country could experience another economic downturn soon.
“We’re monitoring that. (Golden Isles Convention and Visitors Bureau President) Scott McQuade, at last week’s (Brunswick-Golden Isles) Chamber (of Commerce) presentation, indicated that they’re already seeing fewer bed nights. However revenues have increased, possibly due to higher rates,” Ours said.
Commission Chairman Mike Browning asked if Ours had seen any other signs of an incoming downturn.
“I have not. (There are) four good indicators, one was the (bed tax). One is building permits, and they’re holding steady,” Ours said. “One is the title ad valorem tax and that is increasing. It’s hard to get a handle on that. We’ll have a better understanding this year because of the law change with TAVT ... but it’s holding steady and has been increasing.
“The other, which I think is a really strong indicator and one I look at closely every month, is the local-option sales tax. This past year, that tax has increased month-over-month to 10 percent each month from the previous year.”
Browning said he wasn’t sure building permits are a good metric for Glynn County, as the number of permit applications still has not caught up to pre-Great Recession numbers.
If another downturn is coming, Ours said the county will need to plan on maintaining its current operations with few to no increases in revenue in the coming years.
The county must approve the next fiscal year’s budget by the end of June.