In two weeks, Savannah City Council will decide whether or not to lower property taxes for city residents.
The proposed millage rate decrease comes as a time when the city is figuring out how to solve a 3.5 million dollar budget shortfall after Local Option Sales Tax impacted the current budget for 2013.
City staff recommended two options to make up that shortfall. They could raise the millage rate almost one full mill to 13.44 mills, which was not recommended action.
The second option is a four step plan to make up the deficit and, at the same time, keep a promise of maintaining or lowering property taxes.
The millage rate decrease is because they do have a plan for the deficit and the 2013 tax digest showed a large increase compared to past years. The city is proposing attacking the 3.5 million dollar budget deficit by first implementing a targeted hiring freeze for all non-safety related positions which would create a total savings of close to a million dollars. Steps two and three would save about 1.4 million dollars, and includes deferring all non-safety related capital improvement projects and cracking down on all over time and other expenses.
The final proposed step is to dip into their Sales Tax Stabilization Fund to wipe out the remaining 1.4 million dollar shortfall. These recommendations have to be approved by city council.
"It is going to be tough but we are very confident our city manager and city employees will keep us afloat and informed as to where we go from here," Mayor Edna Jackson told WTOC Wednesday.
Right now, the City of Savannah is looking at lowering the millage rate a small amount, from 12.5 to 12.48 mills.
The Chatham County Board of Assessors came to the city with their 2013 tax digest with some good news. The total taxable digest for 2013 grew 1.5 percent from 2012, the first significant increase since 2008.
Taxpayers may not have noticed, but the city has noticed, one statistic. Since 1996, the city millage rate has gone down 28 percent. Almost every year it has dropped more and more, the Mayor said. The city is trumpeting that number because in 2010 and 2011, when the tax digest decreased and state code called for millage increases, city staff found a way to not only refuse property tax increases, they avoided a long-term increase and brought the millage rate back down.
"Well, nobody wants to give us the credit for that but when you look at lowering that millage rate, we've only had to raise it point five percent...once," Mayor Jackson said.
That increase was in 2010, and the rate increase lasted six months until they balanced the budget, which the Mayor says was a tough budget year.
The millage rate decrease will be discussed Thursday, and a public hearing and planned vote is set for the Aug. 8 agenda.