CATEGORY: ALD Tupelo City Council

AUTHOR: MOULDE

HED:Millage rate cut almost 12 percent

By Philip Moulden

Daily Journal

Tupelo's City Council Monday reduced the city's property tax rate by 3.5 mills for the coming year, a cut of about 12 percent from the current tax rate.

At the same time the council, meeting in a special session, cut the millage rate for the city school system by 9.68 mills, a reduction of 15 percent.

The changes put the city's regular tax rate at 26.47 mills and the schools' rate at 53.53 mills, a combined total of 80 mills.

One mill of the city cut came from the Major Thoroughfare Program, which has been funded through a 10-mill levy following approval by city voters in 1991 and 1996. The rate will drop to 9 mills for the coming fiscal year, but the program is still expected to take in about $274,000 more than it did this year.

One mill generally equals $1 in tax for each $1,000 of assessed value of a property. In the city, one mill raises about $330,00.

But the tax-rate reductions won't mean a tax cut for many Tupelo home and business owners.

A countywide reappraisal of existing properties that goes into effect for the 2000 tax year boosted assessed values an average of 30 percent. Year 2000 property taxes are due Jan. 1, 2001.

For the owner of a homestead-exempt $60,000 home whose tax appraisal climbed that 30 percent, the coming bill for the city and city schools will be up about $65 from this year, an increase of 20 percent.

An exempt Tupelo homeowner whose home value climbed from $100,000 to $130,000 (a 30 percent increase) would owe about $108 more, a boost of almost 16 percent.

Many seniors citizens and disabled taxpayers may also see significant jumps, in some cases paying real property taxes for the first time since turning 65.

That's because the state exempts the first $60,000 from taxes on homesteads where a head of household is over 65 or disabled. Reappraisal almost certainly moved many from the fully exempt category to a taxable position.

However, some of the increase in real property taxes could be offset by reductions in taxes on automobiles and business personal property such as furnishings and equipment. The overall 14 percent cut in the combined city-school tax rate would apply directly to cars and personal property, which experienced no abnormal value jump this year.

The new tax rate will add about $270,000 to city coffers, but all that is derived from new properties added to the tax rolls this year, officials said.

The council vote was 7-1, with Ward 5 Councilman Tommy Doty objecting to the school rate. While the rate is almost 10 mills below the current levy, it will still give the schools an additional $650,000 in the coming year, Doty complained.

Ward 4 Councilman Boyce Grayson was late for the special session and missed the tax vote.

The council is required by state law to set a tax rate adequate to fund the school system's budget, which was approved by the school board in July.

City property owners also pay county taxes. Lee County supervisors are expected to set a tax rate late this week and have promised it will be lower than the current year's rate.

A public hearing on the county's tax rate and budget is set for 2 p.m. Thursday at the Lee County Justice Center.

In other action, the council approved an interlocal agreement with the city of Saltillo to handle waste water from a proposed gas-fired electricity generating plant.

Plans call for the Saltillo plant to use about five million gallons of water a day, 10 percent of which would be returned as waste water. But the water would contain only concentrated minerals and wouldn't need normal sewage treatment, Chief Operations Officer Phil Sullivan said.

The Saltillo water could be introduced at the end of the treatment cycle, where it would be diluted through mixing with the plant's normally treated water.

Saltillo, which would build and maintain the line to the treatment plant, would pay 20 cents per 1,000 gallons for the treatment service, or about $100 a day for an expected 500,000 gallons.

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