County Positions To Pay Off Debt To Thwart Property Tax Increase

Jefferson County is positioning itself to pay off debt that would likely necessitate a significant property tax increase inside the next ten years if left unchecked. During the first quarterly meeting of 2023, the Jefferson County Commission approved a motion from the budget committee to use excess funds in the Debt Service account to pay off around $2.4 million dollars of remaining debt for the Justice Center building. Clearing the Justice Center note will pay off the last portion of debt that was incurred by the County, leaving only school and nursing home debt on the books.

Previously, Jefferson County carried an annual payment of nearly $1 million dollars in their budget for payments for the Justice Center debt. Those funds have been considered in the property tax rate for many years. With the payoff of the Justice Center, the one million dollars previously used for that payment can be encumbered to help clear a large note that is currently due to have large balloon note payments of $ 4 million dollars per year starting in 2034 and continuing until the $16 million dollar debt is cleared.

The current note for the school debt in question currently is interest only until 2034 and Jefferson County is not permitted to make any principal payment until that time. In an effort to avoid those hefty lump sum payments, the note will be renegotiated in the next fiscal year which is the earliest time that renegotiation is allowed. With the savings from the payoff of the Justice Center, whose note was to come due in 2026 and the encumbrance of funds previously assigned to that balance, property taxes should not be increased to address the $16 million dollars school debt.

While the school debt in question is not the only debt associated with the school building/renovation program or nursing home building, it does represent a substantial part of the debt carried by Jefferson County tax payers. The management of this debt, along with recent “cash” allocations for building programs, renovations, compliance and other needs in Jefferson County is designed to control the need for future leaps in property tax and gives room for needs consideration as the County moves toward a long range plan.