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Late tax bills force BOE to borrow
Property tax bills won't have state homestead exemption

The tax digest in McDuffie County will be late getting to officials with the Georgia Department of Revenue this year. While that is a certainty, so is the fact that local government may suffer the brunt of it all from a financial standpoint.

Just last week during a work session of the McDuffie County Board of Education, School Superintendent Jim LeBrun said such a problem hurts cash flow.

"We are still putting out money, but we have no cash flow coming in as far as local revenues, and that puts us in a bind," Mr. LeBrun said. "We will probably have to pursue a TAN (tax anticipation note). It is not a result of any mismanagement of funds or any wrongdoing on anyone's part. It's just because we don't have any cash flow."

Tom Smalley, who serves as school system comptroller, said school officials have about $1 million in expenses monthly.

"We have $846,877 cash right now, we can live on that at this point in time, but we cannot end the year on that. I look at what do I have available to pay our bills, and $847,000 will last us one more month. Salaries are not affected by the local revenue -- that comes from the state. The problem is not in the expenditures; the problem is in the timing of the revenue receipts."

School board members approved during their regular meeting to pursue a TAN. Mr. Smalley said wording of the TAN would be open-ended, so it could be reoccurring. The application also will not specify a dollar amount, but he said it should be around $3 million to $4 million. All local banks will be invited to bid on the loan, and the school system will go with the lowest interest rate.

Tax anticipation notes are one type of note issued by municipalities. Generally, the tax anticipation note is issued by the state or local government with the understanding that a certain amount of taxes will be collected within an appreciable period of time. The note allows the municipality to fund capital projects now rather than wait for the actual collection of the taxes.

McDuffie County Manager Don Norton also has expressed concern about tax dollars coming in before year's end.

"It's a problem for sure," Mr. Norton said. "We just have to get by for the time being as best we can. We're all hoping this sort of problem will soon be resolved once the tax bills go out and we start receiving some funds."

Tax Commissioner Sandra Whitaker anticipates tax bills being mailed by Nov. 9.

"That's what we're shooting for right now," Mrs. Whitaker said last week.

Once property owners receive their tax bills, they have 60 days under state law to pay them.

The normal due date for taxes to be paid in McDuffie County is Nov. 20, but because the county requested and received two 30-day extensions to prepare this year's tax digest, property owners get a little more time to pay. As a result, it actually backs up the amount of tax revenue being shared among various city and county governments.

McDuffie County is one of 18 counties in Georgia that sought a tax digest extension this year.

"Things should go a lot smoother next year," Mrs. Whitaker said.

With the loss of the homestead exemption grant of up to $8,000 this year, homeowners will be paying more taxes.

The maximum amount homeowners will pay in McDuffie County will be $201.92, according to Mrs. Whitaker. Those living in the city of Thomson will see their amount increase to $250.72, while those living in Dearing will see an increase of $207.52, she said.

Mrs. Whitaker said local government officials had nothing to do with the loss of the homestead exemption.

"This is not a county-generated take back," she emphasized. "This is something the governor sought because of all the cutbacks in state government."

She pointed out that homeowners still will get the homestead exemption, if they applied for it.

"They just won't get the extra that had been coming from the governor's homestead grant," Mrs. Whitaker said. "The homeowner will now absorb that amount."

If tax bills go out by Nov. 9, then property owners would have until Jan. 9 to pay.

Web posted on Thursday, October 15, 2009

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