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Tax rates could go down but probably won’t

Will cities, county follow revenue neutral rate?

Staff writer

Appraisal figures released Friday indicate Marion County taxpayers could be in for lower tax rates if taxing units agree not to take advantage of appraisal increases and keep taxes at so-called revenue neutral rates.

According to data released Friday by the county clerk’s office, a mill rate 2.921 lower than this year’s 75.878 would give Marion County the same amount of taxpayer money in the coming year.

Similar rate reductions would generate the same money as this year for city governments:

MILL REDUCTIONS
TO GENERATE SAME TAX REVENUE

  • Burns, 6.808 mills.
  • Durham, 2.465 mills.
  • Florence, 6.390 mills.
  • Goessel, 6.120 mills.
  • Hillsboro, 3.063 mills.
  • Peabody, 8.234 mills.
  • Lehigh, 7.973 mills.
  • Lincolnville, 4.185 mills.
  • Lost Springs, 1.257 mills.
  • Marion, 6.649 mills.
  • Ramona, 4.913 mills.
  • Tampa, 3.176 mills.

Before taxpayers celebrate lower tax rates, however, they should consider that most taxing units historically have ignored revenue neutral rates and kept tax rates roughly the same as in the current year.

This means any increase in assessed value will generate additional revenue for the taxing units.

Since much of the increase in valuation comes not from new construction but from higher appraisals of existing property, this means property taxes don’t go down.

Many municipalities wait for release of appraisal figures like these each year before determining budgets they will present later this summer.

What mills mean

A mill is equivalent to $1 for each $1,000 in assessed valuation of property.

Homes are assessed at 11.5% of their true market value. A home worth $100,000 would be assessed at $11,500. One mill on that house would amount to $11.50.

If, for example, the county uncharacteristically were to decide to keep its tax rate at the revenue neutral rate, that would be the equivalent of reducing county taxes on a $100,000 home by $33.59.

The $100,000 home probably was appraised as being worth less in previous years.

A modest 3.8% increase in the home’s appraised value would consume all $33.59 of the tax decrease a revenue-neutral rate would create.

At Monday’s commission meeting, commissioner Kent Becker said he wanted to develop a revenue neutral budget even though “we’re dealing with double-digit inflation.”

In fact, this year’s inflation rate has averaged between 3% and 4%.

“It may cost us a project or two,” Becker said. “These six-digit income people need to see some relief. I’d hate to think we’re putting people out of their homes.”

Staff writer Phyllis Zorn contributed to this story.

Last modified June 19, 2024

 

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