City faces budget crisis amid rising property tax challenges

In a recent government meeting, officials discussed the implications of adopting a millage rate higher than the rollback rate, which is set at 2.59 mills for the city of Newnan. The proposed rate of 3.12 mills would require extensive public engagement, including three public hearings and advertising efforts, before any decision could be made.

The rollback rate is determined by the cumulative reassessed value of properties in the city, impacting property tax calculations. For instance, property owners are taxed on 40% of their home value, meaning a $400,000 property would be taxed on $160,000. The city has historically opted for the rollback rate, but recent changes, including the loss of a significant commercial taxpayer, have raised concerns about budget shortfalls.

The city’s budget relies heavily on local option sales tax, which has become the largest revenue source, exceeding $12 million annually, compared to approximately $6 million from property taxes. However, sales tax revenues have recently plateaued, with a notable 7.5% decline reported last month. This stagnation, coupled with rising inflation and increased operational costs, poses challenges for maintaining service levels and balancing the budget.

Officials highlighted the need for careful financial planning, noting that adopting the rollback rate could lead to a projected deficit of nearly $900,000 in the general fund for the upcoming year. As the city navigates these financial hurdles, the decision on the millage rate will be crucial for sustaining public services and addressing community needs. The final public hearing on the matter is scheduled for later this evening.