City adopts 2019-2020 budget, tax rate

The city of Graham adopted their 2019-2020 budget and tax rate during a meeting Thursday, with a rate $0.6672166 per $100 valuation.

The previous year’s tax rate for the city was $0.658126 per $100 valuation, with an effective tax rate of $0.653428 per $100 valuation in 2018-2019. The effective rate is the total tax rate needed to raise the same amount of property tax revenue from the same properties in both the 2018 and 2019 tax year.

The 2019-2020 city adopted rate of $0.6672166 per $100 valuation is a 2.5% increase over the current effective tax rate which decreased to $0.650943 per $100 valuation. The increase was to account for the general fund revenue being $50,052 in the red on the proposed budget.

“This is a proposed rate that was presented to the community and two public hearings have been held on this matter,” Anderson said. “We are proposing a rate that would be 2.5%, above the effective rate, (a rate) of $0.6672166.”

The city council spoke about a potential raise in taxes to balance the budget accordingly during their budget workshop Thursday, Aug. 15. The 2.5% tax rate increase over the effective rate will raise an additional $52,551.82 and balance the budget.

For a home valued at $75,000, the 2.5% tax rate raise will increase from $489.53 under the current tax rate to $500.41 (a difference of $10.89). For a home valued at $150,000, the tax rate will increase from $979.05 under the current tax rate to $1,000.82 (a difference of $21.77). For a home valued at $225,000, the tax rate will increase from $1,468.58 under the current tax rate to $1,501.24 (a difference of $32.66).

The council set their proposed budget and tax rate during the budget workshop Aug. 15, setting a proposed tax rate of $0.676981 per $100 valuation, or a raise of approximately 4% over the effective rate of $0.650943 per $100 valuation. Anderson said in the previous two public hearings that even though a 4% proposed increase from the effective rate was proposed, the city was looking at a 2.5% increase to make up for the negative value in the general fund proposed budget.

“As any taxing entity has to do, you have to advertise what you anticipate your tax rate to be,” Anderson said in a public hearing Tuesday, Sept. 10. “(…)The max we can go is 8%. A lot of entities will actually go ahead and advertise that they could raise up to 8%. What the city has done this year is during our negotiation and discussion we thought 4% would easily cover us, so when we posted all of our required language in the paper, we advertised a 4% increase, and what we area actually looking at is that negative $50,000 in the general fund and what we would need to do to raise that $50,000 is raise the tax 2.5% from the effective rate.”

According to city ordinance 1091, the division of all money collected from ad valorem taxes, including delinquent taxes, penalty and interest will have 91.58% deposited in the general fund and 8.42% will deposited in the general obligations fund to retire debt on certificates of obligation.

For the rest of the story, see the Saturday, Sept. 21 edition of The Graham Leader.