Millage and revenue: What does it mean?
Published 12:00 am Sunday, September 10, 2000
Much of the talk about city and county taxes and budgets in the past two weeks comes down to millage rates and revenue.
But what exactly do they mean to each government?
The city and county must both assign a millage rate to collect ad valorem taxes — taxes assigned to property, such as houses, vehicles and businesses.
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But what exactly is a &uot;mill&uot;? The dictionary definition is &uot;a money of account equal to 1/10 cent,&uot; but the value of a mill in the City of Natchez and in Adams County are two different things.
Last year, one mill in the city brought in more than $47,000. The same mill in the county brought in just more than $154,000.
That adds up to $1.5 million in ad valorem tax revenues received by the city, compared to almost $7.8 million by the county for the same time period.
The answers why are simple: The county’s millage rate is higher, and the county, which is larger, taxes more property.
Last year, the city’s millage rate was 33.033 compared to the county’s 53.52.
Natchez aldermen just voted this week to raise its millage rate to 37.152, a 12 percent increase.
On Tuesday, the county will consider a budget which would raise its millage rate to 55.47.
According to county tax rolls, the county has about 17,900 parcels of property. Of that amount, 52 percent are located inside the city limits, leaving 48 percent of taxpayers to pay only county taxes.
But, Adams County Tax Assessor Reynolds Atkins said, many of the parcels fall under certain tax exemptions, including property owners age 65 and older, so the percentages may not accurately reflect the amount collected by the two governments.
City residents pay both county and city taxes, but they pay county taxes at a slightly reduced millage rate, because they are not taxed for volunteer fire protection.
But even though the city and county have different millage rates, they have about the same amount of money allocated to their general fund budgets — the money used to run each government.
So how does the city make up the difference?
While the city receives lower ad valorem tax revenue, it also receives sales tax revenue — $4.6 million last year.
City Clerk Donnie Holloway said the city depends on sales tax revenues for 58 percent of its total revenues.
&uot;That’s our primary income,&uot; Holloway said. &uot;That’s what we operate the city on.&uot;
The county, meanwhile, depends on ad valorem taxes for nearly the same percentage of its total revenues.
Other county revenues come from state grants, licenses and commissions, state-shared revenues, and charges for services, said County Administrator Charlie Brown.
In fact, the county does not collect any sales tax revenues at all. By state law, all revenues from sales made outside of municipalities goes directly to the state.
Brown said that’s the main reason the county’s ad valorem taxes are higher.
&uot;They have greater revenues than us because of the sales tax,&uot; he said.
Past efforts statewide to get the Legislature to give some sales taxes back to counties have failed.
Supervisor Lynwood Easterling said he would like to see those efforts continue.
&uot;That would benefit everyone,&uot; he said.
Ad valorem taxes, including property taxes on residences and businesses located within city limits, make up only 18 percent of the city’s revenues.
&uot;Obviously, sales taxes are very important,&uot; Ward 6 Natchez Alderman Jake Middleton said.
&uot;We couldn’t operate without them,&uot; Mayor F.L. &uot;Hank&uot; Smith said.
But although sales tax revenue is the main source of income for the city, it is also difficult to rely upon.
When putting together the budget each year, city officials must make projections on how much money they will receive from taxes.
Those estimates are based on figures from the previous year and patterns that have developed over the years.
But, because sales taxes are more dependent on the ever-changing economy, including tourism, making those projections can be difficult.
&uot;It’s a guessing game,&uot; Holloway said.
&uot;We don’t know how many people are going to come here and how much money is going to be spent,&uot; Middleton said.
With this in mind, the city’s budget has to be more flexible than the county’s, which is based on more stable property taxes.
Middleton said he tries to be conservative when it comes to budgeting.
&uot;You need to cover your bases as best as possible,&uot; Middleton said.