Property tax revenue rises in Morgan, helped by construction, industrial base

By Michael Wetzel

For the Enquirer

A jump in construction of Morgan County residential and commercial properties means more property tax revenue – but most tax revenue continues to come from the county’s industries.

Amanda Scott, county revenue commissioner, said the county’s property tax revenue has more than tripled in the past 24 years, from $24 million to $74 million annually, but residential construction plays a relatively minor role in the increase.

“The vast portion of this (revenue) growth can be attributed to industry locating in Morgan County and the expansions of existing industry,” she said. “It takes hundreds of mid-price homes being built to equal the capital expenditure made by one new industry like United Launch Alliance.”

Tax revenue received is distributed to 14 entities in the county, including public school districts, the county general fund, municipalities, volunteer fire departments and road and bridge departments.

“Property tax revenue is an important lifeline to local government, with 90 percent of the $74 million we collect staying here in Morgan County,” Scott said.

According to Scott’s office, projected revenue for fiscal year 2022 will benefit Decatur City Schools ($19.5 million), Morgan County Schools ($14.57 million) and the Morgan County Commission general fund ($12.2 million) as the three highest recipients of collected property taxes.

The county commission’s general fund budget pays for salaries and services including the sheriff’s office, parks and recreation, senior centers and maintenance.

In fiscal year 2022, which starts Oct. 1, the general fund budget is $11.6 million, up from $11.15 million in the revised 2021 budget and $10.44 million in the 2020 budget.

Ray Long,
Special to the Enquirer

“We’re thankful for the growth we’re seeing,” said commission Chairman Ray Long . “With it, we have more tax money to provide services, make improvements and, most of all, pay our employees better so we can retain them. We do our best to be competitive, but government really can’t compete with the private sector (benefits).”

He said North Park near Priceville will be getting two new ballfields. Satellite tax and tag offices are being constructed in Hartselle and Cotaco.

“The last three years, we’ve made pay adjustments to keep our people,” he said. “We’re fortunate everything is still booming here. Some places have struggled, but we’re booming here.”

As an example, he said in 2017, sheriff’s deputies were starting at $15.42 an hour. Now, he said, starting pay is $19.06 an hour and will be $19.35 after a probationary period.

PROPERTY VALUES

Depending on where homeowners live, they might see property taxes go up annually, Scott said.

“Our appraisers review 25 percent of the county each year, assessing and appraising new improvements such as home additions, pools, fences, etcetera,” she said. “We are consistently gathering sales data on a daily basis and analyzing those sales and making adjustments to values as needed on an annual basis. If you live in a ‘hot area’ with a lot of sales and improvements, your tax could go up.”

She said sometimes property taxes fall because of blighted neighborhoods.

She estimated a new house in the Priceville area appraised at $200,000 would generate about $700 in annual property tax.

She said the assessed value of the home would be $20,000. The 37.4 millage rate would be $748. A homestead exemption of $53.60 would bring the total property tax to $694.40.

Local contractor Josh Garrett, president of Garrett Contracting of Decatur, said he is seeing strong demand in housing and commercial construction.

“It’s pretty cool to see an empty field become a restaurant, store or fire department. We’ve blown up with exponential growth in the past five years,” Garrett said, adding his employee payroll has climbed from three to 15.

“Finding qualified and knowledgeable workers is difficult nowadays,” he added. “I guess it’s a good problem to have though. It means business is strong. It feels great to be part of it.”

Property values continue to rise in the county, with strong growth north of Priceville leading the way, according to county officials.

“Priceville is the hottest area,” said Tina Terry, president of the Morgan County Association of Realtors. “Burningtree and Chapel Hill Road areas are hot too. Actually, all of Morgan County is going really, really good right now.”

Mike Kelley, assistant county engineer, said areas east of Hartselle and just outside the city limits of Priceville and Decatur are growing.

“It is definitely increasing the property value in these areas,” he said. “A developer is talking with our department about a big development in the Laceys Spring area.”

Priceville Mayor Sam Heflin said there is no city property tax, but he is encouraged with the growth his city is seeing. “Growth helps us all,” he said. “The county does a great job working with us.”

HOME VALUES RISE

According to the Alabama Center for Real Estate, the house price index shows the median price of single-family houses in the Decatur metropolitan area at $190,580 in 2020, up from $178,770 in 2019.

The ACRE chart, which dates back 28 years, shows a house price index of $100,580 in 1993 for Decatur.

In the rural county areas, the median prices were $139,550 in 2020 and $132,250 in 2019.

Building permits for single-family dwellings in the Decatur area continue to rise, too, according to ACRE. In 2019, the latest numbers available, 169 permits were issued. That number is up 17 percent from the 145 issued in 2018. In 2005, 325 permits were issued.

In Morgan County, 218 single-family building permits were issued in 2020, and 174 were issued in 2019. The highest number on record was 647 in 1996, and the lowest was 91 in 2009.

Even though houses are springing up throughout Decatur, Priceville and the county, the driving force for property tax generation remains industries along the river, Scott said.

“In the past five years, there have been numerous expansions resulting in hundreds of millions of dollars in capital expenditures,” she said.

Jeremy Nails,
Special to the Enquirer

Jeremy Nails, president and CEO of the Morgan County Economic Development Association, said expiring tax abatements will add cash to the county’s coffers.

“The number of large industrial construction and expansion projects certainly adds to increased property tax revenue, and several more are still under construction,” he said.

Some of the larger recent and planned expansions, he said, are at Daikin, Hexcel, Ascend, GE and Polyplex.

“In addition, annually there are projects that will see their 10-year tax abatement period expire,” Nails said. “Those projects will now be paying the full property tax rates on their real and personal property that was part of their original qualifying capital investment.”

County tax records show Nucor Steel of Decatur is the top property tax-paying company here. In the 2021 fiscal year that ends Sept. 30, Nucor paid $3.79 million. Hexcel Corp. was second at $3.69 million. Indorama Ventures is third at $2.5 million, and 3M is fourth at $2.2 million.