Baker Tilly Reviews Decatur County Financial Plan Amid New Tax Legislation

During the recent Decatur County Commissioners Meeting held on July 21, 2025, significant discussions centered around the financial implications of new legislation affecting local tax structures and budget planning for the upcoming years. The meeting featured a presentation by Queen Statham from Baker Tilly, who provided an overview of the county's financial plan and the anticipated impacts of legislative changes.

One of the primary topics was the introduction of new legislation that modifies homestead deductions and introduces additional credits for residential properties. This legislation is expected to slow the growth of the county's net assessed value and could potentially reduce it, which may lead to increased property tax rates. Statham emphasized that as net assessed values decline or stagnate, property tax rates could rise, resulting in more circuit breaker credits issued to taxpayers, thereby reducing overall property tax revenue.

The county's maximum levy growth was also discussed, with the current cap set at 4% for 2026. Statham noted that if the legislature does not extend this cap, the county could see a growth rate closer to 5.5% in 2027. However, the uncertainty surrounding future legislative actions adds complexity to budget planning.

Another critical point raised was the impending changes to the local income tax structure, which will take effect in 2028. The current local income tax shares will expire, and the county council will have the option to establish new taxes for general services, fire protection, and other local needs. Statham highlighted the need for collaborative discussions among county units to determine the best approach to these changes.

The meeting also addressed the anticipated reduction in property tax revenue, with preliminary estimates suggesting a decrease of approximately $518,000 starting in 2026. This reduction is expected to grow in subsequent years, prompting the county to adopt a cautious approach in budget planning for 2026, with an estimated budget of $12.4 million, down from $13.4 million in 2025.

In conclusion, the discussions at the Decatur County Commissioners Meeting underscored the financial challenges posed by new legislation and the need for strategic planning to navigate potential revenue reductions. As the county prepares for these changes, officials will need to engage in thorough discussions to ensure that budgetary decisions align with the evolving financial landscape. The next steps will involve finalizing the budget for 2026 while closely monitoring the impacts of legislative changes on local revenues.