Canton City Council Keeps Property Tax Rate Flat

The city of Canton will have the same millage rate for the seventh consecutive year.

The Canton City Council unanimously voted July 18 to maintain a millage rate of 5.4 mills, which has been the rate since 2017.

But the city is expected to see $639,467 more in tax revenue over the previous year, or 5.82%, due to growth in the digest.

Under state law, if a city keeps the same millage rate but collects more tax revenue due to rising property values, it’s considered a tax increase.

“The goal is always to deliver the highest possible quality services at the lowest possible cost to our citizens, and I believe we have done that progressively even through the pandemic when other cities suffered some major revenue losses,” Canton Mayor Bill Grant said. “I want to applaud this council, former council and the former mayor for their fiscal responsiveness throughout. I am proud of the work we do. I am proud that we are still the lowest millage rate of any city in the county by far, and one of the lowest in the state.”

Canton Finance Director Melissa Forrester said that per the Cherokee County tax assessor’s May 9 report, 69.68% of the increase in the city’s digest is attributable to new construction and the other 30.32% is the result of inflation.

With a millage rate of 5.4 mills, a home valued at $300,000 would receive a Canton property tax bill of $648, according to the city. A home valued at $400,000 would have a city property tax of $864. A home valued at $450,000 would receive a Canton property tax bill of $972.

A home valued at $450,000 with a senior exemption would pay $367.20 to the city, Forrester said.

A total of 3,332 properties currently receive the city’s senior exemption, Forrester said. The total value of the senior exemption in 2024 is $1.9 million.

“The flipside of that is the city has to come up with $1.9 million from other revenue sources,” Forrester said.

Before exemptions, city residents see 63% of their property taxes go to the Cherokee County School District, 18% go to the Cherokee County government and about 19% goes to the city of Canton, Forrester said. That 19% pays for city services including police, fire, roads, parks, municipal courts, building inspection and code compliance, and tourism.

Canton’s millage rate includes the city’s contract for fire services with Cherokee County.

The Cherokee County Board of Commissioners voted July 16 to set the county maintenance and operation millage rate at 5.224 mills. Commissioners also voted to set the fire district tax rate at 2.888 mills. The county’s previous fire tax was 2.764 mills.

“That little inflection point from last year at 2.764 to the current year is going to cost the city just over $300,000,” Forrester said.

Residents, city officials talk taxes

Canton held three public hearings prior to the vote to give citizens the opportunity to ask questions and comment on the millage rate.

Three city residents spoke at the third and final hearing July 18.

Bob Stehlik asked where the revenue from property taxes is going and asked about property taxes from apartments.

“We have this large pool of apartment owners, now the apartment complex owners have to pay a property tax on their property — is that equitable to what I have to pay?” he asked. “If there’s 100 people on this piece of property and I am paying $800, are they paying $80,000? Is that apartment complex paying the same amount or are there exclusions? Maybe we can generate more revenue by raising the property tax on these apartment owners?”

Canton City Manager Billy Peppers said that last year, The Crest at Laurel Canyon apartment complex paid $151,200 in city property taxes and had a total tax bill of over $800,000; Legends at Laurel Canyon paid about $99,000 in property taxes to the city.

“Additionally, those complexes are not applicable for any homestead exemption,” he said.

Chris Everett also asked where the money is going, and expressed concerns about the rate the city’s budget has grown.

“What you guys have been doing over the last seven years is taking in more and more money and spending more and more — as the gentleman asked, where is this money going?” Everett asked. “From your exhibit, in 2019 you took in $5.9 million. This year, you’re projecting to bring in $11.6 million — that’s a 97% increase. Who can keep up with that rate of growth? It’s unsustainable, and yet, we are still planning more projects that are going to cost more money for the city, and then you’re going to contend you’re not raising taxes, that it’s the tax assessor.”

Thomas Weaver said he feels “continued reliance on reserves” is not sustainable long term and could “create even harder decisions down the road.”

Peppers said the city has about seven months of reserves, but $10 million of that is a one-time fund of federal American Rescue Plan dollars, which is earmarked for capital projects.

“Those projects haven’t taken place yet, but that $10 million will go down out of the reserve fund. That leaves the city a reserve fund of a little over three months,” he said. “Our auditors have suggested that a comfortable fund balance of unrestricted funds is between two and four months of revenues...It’s important to note that reserves don’t come from property taxes.”

Pepper said the city plans to present the budget to the city council Aug. 1, with possible action from the city council on Aug. 15.