City looks to offset rising healthcare costsPublished 10:23pm Tuesday, July 22, 2014
The City of Bainbridge released a notice of property tax increase this week, announcing an increased millage rate that will raise property taxes by 54.31 percent.
According to the notice, the “tentatively adopted” rate will increase to 5.572 mills, up a full two mills from the previous rate of 3.572 mills. The new rate will be voted on at the next City Council meeting Tuesday, August 5 in the City Hall Council Chambers.
“Since 2008, we have been drawing on the city’s reserves hoping other things would rebound — sales tax and franchise fees — but that hasn’t happened,” City Manager Chris Hobby said. “The city auditors say we’re a the low end of healthy. We’re still healthy, but we have to do something now to make sure we don’t get to unhealthy.”
Mayor Edward Reynolds said that the city’s sales tax has not seen increases since 2008.
“With no change in sales tax — because when the economy took a downturn, sales tax took a big drop — we’ve basically been doing the best we could to reduce our expenditures over the last five years in response to that reduction in sales tax, but every year we’ve had to draw off of reserves,” Reynolds said.
Hobby said that a large part of the equation is employee-related expenses, specifically rising costs in healthcare.
“Bottom line is we’re spending a lot more with less people,” Reynolds said.
The city is spending about $680,000 more per year on employee-related expenses, even though the workforce has decreased by 40 people since 2008, which is due to rising healthcare costs, Reynolds said.
“Although a millage rate increase is our choice of last resort, we have already taken the other steps over the last six years such as reducing our workforce from 185 to 145 employees and by identifying and cutting elective expenditures,” Reynolds said in the statement.
Reynolds said that the city continues to be in a “fortunate situation” because of its access to unrestricted reserve monies, but because the city has drawn from them every year, it now has to find other ways to make up budget shortfalls
This new rate will be the highest millage rate Bainbridge has seen since the late 1990s, according to data from the Georgia Department of Revenue.
“A city millage rate of 5.575 is still by far the lowest within the region and where savings are available we will pass them along,” Reynolds said in a statement released Monday.
Reynolds said that the best way to increase sales tax revenue is by adding jobs.
“We need more people with jobs that then go and spend their money on goods and services and the money comes back to us in sales tax,” Reynolds said.
There will be three opportunities for concerned citizens to address the increase via public hearings at the City Hall Council Chambers on July 30 at 10 a.m., July 30 at 4 p.m. and August 5 at 6:30 p.m., which is also the next regular City Council meeting.