Taxes rising or falling? Depends on ‘spin’
Even as the county and its cities and school districts struggle to determine how to respond to a new state law designed to prevent “hidden” tax increases, townships and other smaller taxing units are taking decidedly different approaches.
Among 15 county taxing entities to have published their proposed budgets to date, only five have chosen to adopt what under state standards is a “revenue neutral” rate.
That means levying the same total amount of taxes as in the previous period, regardless of how that might impact the number of mills individual taxpayers must pay.
In three of those cases — Doyle, Fairplay, and Liberty townships — proposed mill rates paid by taxpayers will decline.
In Fairplay, the decline is considerable. Absent any change in assessed value, if the township’s budget is approved, an individual property owner will see a 31.9% decline in township taxes, but the township still will receive as much total tax money as it did before because of increases in assessed value.
Much of that increase is attributable to expiration of a 10-year tax exemption for the Keystone pipeline that traverses the county north to south.
Doyle Township taxpayers would see more modest savings of 2.2% on their mill rate, while Liberty Township taxpayers would see a 1.9% decline.
Adopting “revenue neutral” tax rates won’t save every property owner, however.
In Durham, decreases in valuation will result in the same money to the city but 4.7% larger bills for individual taxpayers. For Grant Cemetery District, a “revenue neutral” tax levy will increase mill rates by 11.0%.
Seven taxing entities chose to ignore the “revenue neutral” rate and will be required to conduct special hearings about increasing the total amount of tax money levied.
In two cases, Catlin Township and Lewis Cemetery District, the mill rate would remain the same but the total amount of taxes levied would increase — by 14.8% for Catlin and by 36.2% for Lewis.
Four townships are proposing to increase both their total tax levy and the mill rate charged for individual properties.
Durham Park would increase total taxes 0.7% by raising rates 1.2%.
Lost Springs Fire District would increase its levy 7.9% and its mill rate 9.3%.
The City of Lost Springs would increase its levy 17.3% and it mill rate 27.5%.
Fairplay Fire District would increase its levy 24.1% and its rate 23.4%.
In only one case would the tax rate decrease but the total levy rise — which seems to have been one of the goals of the “revenue neutral” budgeting law the legislature adopted instead of its previous property tax lid.
Gale Township is proposing to cut its tax rate 25.6% but increase its levy 22.1%.
Two taxing bodies — Peabody Township and the City of Ramona — hope to hold the line on taxes, keeping the same mill rate even though it will mean a 2.1% smaller levy for Peabody and a 1.1% smaller levy for Ramona.
All information comes from proposed budgets published in this week’s and last week’s Marion County Record, Hillsboro Star-Journal, and Peabody Gazette-Bulletin.
Proposed budgets are not final. Each taxing unit must conduct a budget hearing, at which citizens may suggest increasing or decreasing the levy or the mill rate.
Once budgets are adopted, generally in the next five weeks, mill rates remain subject to change with changes in property appraisals.
In the City of Marion, for example, last year’s proposed mill rate at this point was 0.005 of a mill lower than the final rate determined in October.
That means Marion’s as-yet unofficially proposed mill rate for next year, estimated to be 0.002 less than this year’s, might actually end up being higher.
Although the county and most of its cities and school districts have not yet published final budget proposals, most are considering budgets that exceed the “revenue neutral” rate and thus will require a second hearing and a recorded vote on whether to increase the levy, regardless of whether the mill rate changes.
In the case of Marion County, keeping the total tax levy the same would result in a nearly 14% savings on mill rates charged to taxpayers, while charging the same mill rate would increase the total tax levy by nearly 18%.