Mayor J. Collins said that could lead to a cut in the millage rate next spring.
“I think it’s time to look at rolling the millage rate back and giving the taxpayers a true refund,” he said. “That’s why LOST was started, to give taxpayers relief in property taxes in the form of millage rate reductions. Instead of spending the new funds, let’s roll back the millage rate and be good stewards.”
Sales tax agreements last for 10 years and are set following the U.S. census.
In Douglas County, Villa Rica’s percentage of sales tax dollars will increase from 0.69 percent currently to 3.67 percent next year and continue to increase to 5.19 percent in 2018, bringing hundreds of thousands of new dollars into the city. The Douglas side of Villa Rica grew from a just few hundred residents in 2000 to 5,589 residents in 2010.
In Carroll County, Villa Rica will receive 7.85 percent of sales tax dollars for the next 10 years, up from 6.5 percent under the old agreement. Overall, the city grew from 4,134 residents in 2000 to 13,956 in 2010, leading to more sales tax revenue.
In negotiating with both counties, city leaders initially refused to sign LOST agreements that would have given them a lower percentage. Eventually, the county agreed to give Villa Rica a higher cut of the funds.
The bottom line is that property taxes in the city may be on their way down soon.
“When we start the new budget process, I’ll propose that we maybe lower the millage rate a little this year,” said Villa Rica City Manager Larry Wood. “We’ll go through some calculations.”
Since 2008, Villa Rica’s millage rate has held steady at 6.775 mills.
There had been discussion at one point that, under Georgia law, sales taxes from the city’s Carroll County and Douglas County side could no longer be mixed, and there were even talks of two separate millage rates. But that appears to be off the table.
“That was put to bed several months back,” said Collins. “I wanted to make sure what we were doing was fair and equitable. Douglas County increased the portion of LOST we were getting and Carroll increased our percentage too. We’re able to now make it more fair and equitable. Now it’s more even.”
For years, Carroll County had a large majority of Villa Rica’s population and thus brought in most of its sales tax dollars even as the Douglas side grew. But that situation has now been remedied, for the most part. Collins added that he spoke with an attorney and said combining sales taxes in the city does appear to be legal.
Wood said he supports keeping the dollars combined as well.
“There is case law out there that says [combining them] is a legitimate way of doing it,” he said. “If you look at cities across the state that are in two counties, most do it the way we do... Honestly, we’d have to add staff to keep up with the accounting if we kept them separate. If a crew worked and they went all over the city, you’d have to figure out when they were in Carroll or Douglas. It’s an accounting nightmare.”
The budget process will begin in early 2013.