Decatur’s City Commission is considering a reduction of its property tax millage rate for city operations. Overall tax revenues are expected to increase because of rising property values, but the millage rate would decline. The following explanation is included in the proposed budget for Decatur’s upcoming fiscal year:
Millage Rates and Potential Increased Homestead Exemptions
Because of the [projected 7.5 percent] increase in the real estate property digest, it is recommended that the General Fund Millage be reduced from 9.70 mills to 9.30 mills. Lowering the millage will result in a $100 reduction in City of Decatur property taxes for a property valued at $500,000. In addition, as part of the November 8, 2016 election, Decatur voters will be able to consider various homestead exemption increases that will apply to the General Fund, Capital Improvement Fund and the DDA Fund. All approved exemption increases will be reflected in the first installment billing in April, 2017. The 2016-2017 Proposed Budgets were developed assuming that all of the exemptions will be approved. The estimated reduction in general fund real property taxes is $310,000 for fiscal year 2016-2017 and $620,000 for fiscal year 2017-2018. An owner occupied property that qualifies for all of the additional exemptions could see a $135 reduction in the first installment tax billing in early 2017.
Due to capital needs, it is recommended that the Capital Improvement Fund Millage remain at 1 mill and due to resident, business and visitor requests for increased community engagement activities, aesthetics, and business development, it is recommended that the DDA Fund Millage remain at .38 mills. The debt service millage for the 2007 general obligation bond s remains at .92 mills and the 2015 debt service millage for school system capital improvements remain at 1.57 mills.
A general fund tax rate of 9.3 mills would be the lowest it has been since tax year 2000. If approved, the new rates would take effect July 1, and would be factored into city property tax bills on October 20, 2016.