The Mt. Airy Town Council held a special called meeting Monday evening to discuss this year’s proposed millage rate. Last week, members of the city council discussed possibly raising the millage rate as much as one mill, ending a 38-year trend of holding the millage rate at 3.91 mills.
Council member Adam Tullis was adamant about looking at hard numbers before arbitrarily proposing a millage rate increase. Those numbers were not available last week for the council to review.
The council had an opportunity to look at this year’s budget and compared it to last year’s budget. Mayor Ray McAllister noted that the alcohol excise tax for only liquor sales, not beer and wine, has been declining. He told the council that in 2020, the city had collected $20,000 in excise tax. In 2021, that amount decreased only slightly to $19,500. However, the downward trend escalated in 2022 to $14,250 collected and in 2023, the city had only collected $3,400 in excise tax to date.
McAllister also informed the council that the town had lost a liquor business and that business would not be renewing their license next year for an additional loss of $5,000 in license fees. He estimates that the city will lose approximately $20,000 in combined excise tax and alcohol license revenue for the year.
Tullis stated that the city started the 2023 budget year with $400,000 in the General Fund. The recommended fund balance or reserve cash to cover operational expenses is three months, according to McAllister.
Tullis stated that the fund balance on hand would cover the city’s operational expenses for nearly a year.
Tullis proposed to keep the millage rate at 3.91 mills and was unanimously approved by the council.
There was no discussion among the council to roll back the millage rate.
A look at the tax digest for this year compared to last year, with the town maintaining the current millage rate, property tax collections will increase by $30,381 due to reassessments and new additions to the digest for 2023. This amount will cover the decreased revenue from the lost business and loss of the liquor excise tax.
The rollback rate would have been 0.45 mills, reducing the millage rate from 3.91 to 3.46. This is equal to the amount of the reassessment of existing properties. That amount is $20,057 or two-thirds of the total property tax increase.
