By Eric Curl
Oct. 1, 2023 – Chatham County officials are planning to develop options for reducing and possibly eventually eliminating the property tax rate paid solely by county residents that live outside of city limits.
The potential changes are being considered at the urging of Chatham County Commissioners Patrick Farrell and Dean Kicklighter, who represent unincorporated areas of the county and have argued for years that their constituents are being taxed unfairly.
During a workshop regarding the matter on Thursday, both commissioners said that the separate property tax rate paid by residents in the unincorporated area, known as the Special Service District (SSD), would be covered by revenues from other revenue sources that instead go to the cities. The revenue sources cited include the 1-percent Local Option Sales Tax, which is distributed to all of the cities and the county.
Watch the workshop here (SSD discussion starts about 1:09:50 mark)
The commissioners took issue with a state law requirement that the LOST funds Chatham receives have to be used countywide and not just for SSD residents, while cities can use the funds for projects solely within their boundaries.
“(Unincorporated residents) are paying their fair share, but not getting their fair share in revenue,” Farrell said. “You would find those numbers far outgo that (SSD) property tax revenue brought in.”
Advertise with Savannah Agenda
Both commissioners made similar complaints about franchise fees, which utility companies charge customers for the use of public right-of-way. The state prohibits the county from receiving revenue from the fees, which are instead divided up among municipalities.
“If you were to treat unincorporated residents like a city we wouldn’t need a SSD tax at all,” Kicklighter said.
Since Chatham is only one of six counties out of Georgia’s 159 counties that have an SSD, the two commissioners said that it has proven too difficult politically to change the state law regarding LOST and franchise fees. Instead, they said they wanted to reduce and eventually eliminated the SSD tax and have unincorporated county expenses paid for using the general fund, which is paid into by both city and unincorporated residents.
Chatham County Manager Michael Kaigler assured the commissioners their concerns were being taken seriously.
“We understand that you all want to eliminate the millage rate in the SSD,” Kaigler said. “We heard that loud and clear, and I think that’s where we’re going.”
However, Kaigler said the changes would have to be made slowly, especially since the county has some significant funding obligations coming up. Those future expenses include undetermined operating costs of the new trial court building and construction and operations of a new Emergency Operations Center/E911 building, along with an estimated $5.5-$6 million annually in potential debt services payments on a planned recreation facility (see facility presentation from the same workshop).
Kaigler said that staff would develop some options for the commission to consider at a future meeting.
County staff presented four possibilities during the workshop, which included:
- Keeping the SSD as is, stabilizing costs and rolling back the millage rate as the unincorporated area changes.
- Transfering funds from the General Fund to the SSD Fund annually to pay for SSD service costs.
- Moving department revenues and expenses from the SSD Fund to the General Fund over a period of several years. Leave only direct services in the SSD such as Police or Fire (“Public Safety Fund”).
- Increasing the homestead exemption on residential property owners in the SSD.
Staff also outlined the pros and cons to each recommendation. Cons cited included the imposition of taxes on city residents who do not directly receive those unincorporated county services. The changes could also divert revenue from general fund services. In addition, increasing the homestead exemption would shift the tax burden to non-residential taxpayers and a millage increase would be required to offset service cuts.
Both Kicklighter and Farrell said they wanted to reduce the SSD burden gradually and not all at once in order to avoid any significant impact to city residents. Kicklighter said his preference was to invest a portion of any growth in the countywide tax digest into the SSD budget to cut that tax rate each year.
Most of the other commissioners, who represent unincorporated and city residents, did not say much regarding the matter, although Aaron “Adot” Whitely did offer some support.
“If there is a way to decrease SSD without increasing (the general fund tax rate), I’m all for it,” Whitely said.
Chairman Chester Ellis said he was not advocating one way or the other, but that if the county did decide to move forward with any reduction, they should take their time and make sure they get it right. They do not want to have to come back and make changes like they had to do with the fire fee after it was implemented.
“I just want us to be sure, very sure, what we are doing will accomplish goal we are setting, but not come back and we will have to make a re-adjustment,” Ellis said.
#StayEngagedSavannah
If you find value in this website, please consider contributing via Paypal to help cover the costs. You can also send contributions via Venmo @Savannah_Agenda. Your support, no matter how much you give, is appreciated and will help ensure the future viability of this community resource. You can also show your support by sharing Savannah Agenda with others via email or social media. Increasing readership is critical to the long-term success of this site.