OCEAN SPRINS, MS — The City of Ocean Springs has acknowledged an error in calculating property tax millage rate for the 2024-2025 fiscal year, leaving the Ocean Springs School District (OSSD) with a $475,000 deficit. The shortfall affects the district’s ability to meet its debt service obligations and will lead to additional costs for taxpayers.
What is the Millage Rate?
The millage rate determines how much property tax is owed per $1,000 of assessed property value. For example, a millage rate of 66.27 mills would result in $66.27 in taxes for every $1,000 of property value.
For the 2024-2025 fiscal year, the city mistakenly set the rate at 64.86 mills, instead of the required 66.27 mills. This 1.41-mill discrepancy reduced property taxes temporarily but caused a significant shortfall in the school district’s budget.
Impact on Taxpayers and Schools
The error has created immediate and long-term consequences:
- Temporary Reduction in Property Taxes
For 2024-2025, homeowners will pay $14.10 less per $100,000 in assessed property value due to the lower millage rate. While this provides a short-term reduction, it has caused financial strain on the school district. - Shortfall Loan and Interest Costs
To bridge the $475,000 funding gap, the school district will take out a shortfall loan. Taxpayers will ultimately cover not only the principal but also the interest on the loan—an expense that would not have been necessary if the error had not occurred. - Incremental Tax Adjustment for Loan Repayment
Starting in 2025, taxpayers will see an additional 0.466 mills added to property taxes for three years to repay the loan. This equates to $4.70 per $100,000 of property value annually from 2025 to 2028. - Restoration of Original Millage Rate
In 2026, the debt service millage rate will return to its original level of 66.27 mills. This adjustment ensures the school district can meet its future financial commitments but does not increase taxes beyond what was previously collected.
Taxpayer Burden
The loan’s interest costs mean taxpayers will bear the financial burden of an error that could have been avoided. While the exact interest amount has not been disclosed, it adds to the overall expense for residents.
The school district has clarified that it did not request additional funding or an increase in millage rates. This situation arose solely from the city’s miscalculation, yet the consequences affect both the district and taxpayers.
City and school officials are working to address the shortfall and restore funding stability. However, questions remain about how the error occurred and what measures will be implemented to prevent similar mistakes in the future. Taxpayers are encouraged to review their property tax bills and stay informed as this issue is resolved.
In a press release, the city and OSSD have stated their commitment to minimizing the impact on residents while ensuring the school district’s financial obligations are met.
