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Taxes Continue to Mount
It's that time of year again, when we get our annual tax statement from the County. I sent this out last year but thought it might be helpful to remind some of you just how our property taxes are divvied up.
The County is allowed by law to collect at least what it did the year before. So even if nothing changed at all... no levy increases, no properties bought or sold, the decline in your property's value, (we have all seen about 25% decline) would not reduce your taxes at all.
The assessed value really only has to do with dividing up the individual burdens and determining the rate the County will need to charge. A higher assessed value, means a lower rate.
Example:
County collects $20M from 1,000 identical homes, $20,000 each
- The homes are valued at $500,000, the rate is .04 (500k x .04 = 20k)
- The homes are valued at $250,000, the rate is .08 (250k x .08 = 20k)
So even though the home value declined by 50%, the homeowner still pays the County it's $20,000. The County did have to double the rate in order to get their share. (There in lies the reason many at the County claim fiscal restraint and government deprivation, due to our low rate.)
Now let's say things did change. Let's say the County helped to take an over 600 acre parcel out of the tax roll. Well who do you suppose is going to make up that difference? The County still gets the established amount even now with
fewer taxpayers to collect it from.
Example: County collects $25M
- (1) 600 acre lot pays $5M, 1,000 homes pay $20,000 each = $25M
- Lot restored to wilderness, 1,000 homes pay $25,000 each = $25M
(These are examples only and do not reflect any actual payments.)
So there you have it... the reason your taxes can go up even when your property value goes down.
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