On November 6th, the citizens of Roswell will be asked to vote for or against a 10 year, $14.7 million bond. The stated purpose of this bond is to pay for “transportation, public safety and recreational improvements” throughout the city of Roswell.
If you ask Roswell City Government, they will tell you that “Property tax rates will not increase because of the bonds,” and “The City is able to make these investments in the community within the current property tax rate.” But recently, I received an e-mail from Roswell for Fiscal Responsibility (RFFR) who claims the bond is “nothing more than a thinly veiled tax increase.”
For most people, terms like “bond,” “millage rate,” and “property taxes” are very confusing. Now, if you take 3 confusing terms, add 2 parties who are arguing about the same issue, then you will quickly find yourself in need of 5 aspirin to cure one big headache!
So, what is a bond? What is the millage rate? How are the two connected? And what affect will this bond have on my property taxes?
What is a Bond?
Simply put, a bond is a debt in the form of a loan. Very similar to a personal loan or a credit card, when Roswell City Government issues the bond, it will go to a financial institution and ask for a sum of cash which it promises to pay back over time with interest. Roswell has existing bonds that will be paid off in 2014, at which point the city will be debt free.
What is a Millage Rate?
No, a millage rate has nothing to do with cars or the price of gas! The millage rate is a tax rate on your property and is used to calculate the amount that you must pay to the city each year in property taxes. Roswell City Council sets the millage rate and the current millage rate is 5.455. To calculate your property tax, Roswell City Government multiplies the value of your property by the millage rate and then divides by 1,000. In Roswell, the millage rate is organized into the following two categories:
|Current Roswell Millage Rate|
|Total Millage: 5.455|
|General Fund Millage: 4.059|
|Debt Service Millage: 1.396|
The General Fund Millage is currently set at 4.059 mils and is used to pay for operational costs, routine maintenance, and to maintain a certain level of cash reserves that the city is required to keep on hand.
The Debt Service Millage is 1.396 mils and is used to make principle and interest payments on existing Roswell bonds (existing debt).
How will the Bond Affect my Property Taxes?
Until this paragraph, it is safe to assume that Roswell City Government and RFFR would agree with the information presented in this article. But this is where the two stories part ways.
According to Roswell City Government:
If the $14.7 million bond PASSES, then “The City can pay for the bond within the current property tax rate” and, “Property tax rates will not increase.” End of explanation. However, Roswell City Government makes no attempt to explain what will happen to property taxes if the bond is defeated.
According to Roswell for Fiscal Responsibility (RFFR):
If the $14.7 million bond FAILS, then your property taxes will actually go down. “How?” I asked. According to state law, if the proposed bond fails, and the existing bonds are repaid, then the current 1.396 Debt Service Millage must be retired and your property tax rate will be reduced from 5.455 mils to 4.059 mils. Again, if this bond FAILS, then your property taxes will go down.
But wait, there’s a catch! If the bond does fail, then Roswell City Government could decide to continue the current tax rate of 5.455 mils. But this creates a political landmine for Roswell City Government. You see, if Roswell City Government decides to continue the current tax rate of 5.455 mils with no bond to repay, then according to state law, the continuation of the existing 5.455 mil rate is actually a tax increase for the citizens of Roswell and Roswell City Government would be required, BY LAW to advertise it as such! – a scenario that would be a political nightmare for any incumbent politician during an election year.
Affect on Property Tax Rate if Bond Passes or Fails
Based on information that I received from Roswell City Government and RFFR, I have outlined the potential outcomes in the tables below:
|Millage Rate if the Bond Passes||Millage Rate if the Bond Fails|
|Total Millage: 5.455||Total Millage: 4.059|
|General Fund Millage: 4.059||General Fund Millage: 4.059|
|Debt Service Millage: 1.396||Debt Service Millage: 0.00*|
*Debt Service Millage rate reset to 0.00 upon repayment of existing Roswell bonds.
I will Be Voting NO on the Roswell Bond
It seems to me that Roswell City Government is using this bond to hide a likely tax increase during an election year. If this is true, then Roswell City Government would prefer to saddle the tax payers of Roswell with a 10 year, $14.7 million dollar debt rather than lower taxes and live within its means. This is an idea that I find simply unacceptable and I hope you do to. After listening to both sides of the argument, I have decided to vote for lower property taxes and against the $14.7 million dollar bond.
I hope you will join me and vote No on the Roswell Bond on November 6th.
Husband, Citizen, Volunteer