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County financial consultant: Senate Bill 1 and assessment trends could push public-safety LIT toward shortfall
Summary
Baker Tilly’s analysis presented to the Henry County Council shows public-safety local income tax receipts are sensitive to property-assessment changes and to state-level shifts in supplemental distributions under Senate Bill 1, leaving the county’s public-safety fund at risk of budget shortfalls in coming years.
Henry County budget advisers told the county council during a budget session that the county’s public-safety local income tax (LIT) is sensitive to assessment trends and recent state law changes, and could face shortfalls by 2027–2029 if assessments do not grow or legislators do not tweak Senate Bill 1.
Jason, the county’s Baker Tilly financial consultant, told the council the model is “very sensitive to the change in assessments” and that reductions phased in under Senate Bill 1 will have a larger effect after 2027. He discussed scenarios showing the public-safety LIT bringing in about $2,196,000 in receipts against a $2,600,000 budgeted appropriation in 2026—leaving an estimated one-year gap of roughly $418,000 if receipts hold flat.
Why this matters: the county uses several dedicated LIT funds to pay for public safety, jail operations and related debt. The council was told those dedicated receipts helped Henry County build a larger operating cushion than many counties, but that cushion declines in multi‑year projections under current assumptions.
Baker Tilly and council members walked the group through how the state’s supplemental distribution is shrinking. Jason explained the state had historically retained a 15% cushion of income tax revenues and occasionally passed supplemental distributions to localities; the constitutional or statutory cushion is being reduced to 5%, which could eliminate a recurring supplemental the county has relied on. Jason said that shift “might mean you get 1 little bump going from the 15 cushion that you have now down to the 5%,” but that overall supplemental receipts are likely to shrink over time.
Council member Shannon offered a numeric contrast of alternate scenarios, saying, “Using Shannon's number, the operating balance would be 6% instead of your 0.82,” reflecting the sensitivity to the assumptions used for receipts. County Auditor Debbie said preliminary certified assessed value (AV) information for 2026 remains outstanding; the council will get an updated Senate Bill 1 impact once the AV is certified.
The consultant recommended the county review multiple scenarios (flat receipts, modest growth, and higher growth) and consider what level of risk the council wants to carry into 2026 and beyond. He also suggested the council decide whether to budget conservatively or present a higher “comfort level” scenario—offering to produce both a conservative and a more optimistic projection for comparison.
Ending: Council members agreed to wait for certified AVs and for additional TIF data before finalizing several levy and allocation decisions for 2026, and to revisit LIT projections when the updated figures are available.
