Branch County homeowners will see lower tax bills after county commissioners voted Thursday, April 16 to roll back the 2018 jail millage, following higher-than-expected tax collections.
The Board of Commissioners will formally approve trimming the jail construction levy from 1.231 mills to 0.78 mills — a roughly 36% reduction — when millages are approved in the coming months.
The county had the option to shorten the repayment schedule on the 2020 jail bonds from the original 2037–38 payoff date or reduce taxes.
County Administrator Frank Walsh noted that the IRS imposes a penalty for arbitrage if investment earnings on bond revenues outpace the interest paid on the original borrowing.
Equalization Director Lyndsey Shembarger said the millage can be adjusted annually to account for any future decline in property tax valuations.
The commission cannot exceed the original millage rate under its annual Headlee adjustments.
The bonds, totaling just over $24.2 million, were issued six years ago to finance construction of the new Branch County Jail after voters authorized the millage in 2018.
Walsh explained that the taxable value across Branch County has been growing at 4% to 5% annually, far outpacing the 1% growth assumption built into the original bond repayment plan. As a result, the current 1.231-mill levy is raising significantly more than needed for yearly payments.
“In 2026, our bond payment is $1,673,250, and at 1.2310 mills, we’re on track to collect about $2,741,737,” Walsh wrote in a memo to the board. “That means we’re over-collecting by roughly $1,068,487 this year alone.”
By law, those excess collections can only be used to pay jail debt and related costs.
Walsh stressed in his memo that none of the bond proceeds or the surplus millage revenue has been spent on anything other than the jail project.
Under the option endorsed by commissioners, the owner of a $200,000 home would see their annual jail debt tax bill drop immediately, and the rate would continue to slide gradually as taxable value grows.
It could fall to around 0.4251 mills by the end of the schedule.
Walsh’s analysis estimated that this “immediate reduction” option would save the homeowner the largest amount, about $702 over the remaining life of the bond.
Branch County Democratic Party Chair Anita Hoyt encouraged commissioners to take credit for cutting taxes, particularly as Coldwater and Quincy schools head to voters in May for school bond millages.
This article originally appeared on Coldwater Daily Reporter: Branch County to roll back jail bond taxes on winter bills
Reporting by Don Reid, Coldwater Daily Reporter / Coldwater Daily Reporter
USA TODAY Network via Reuters Connect
