The city of Franklin keeps doing it, and I keep writing about it in the hope of informing the over-taxed property owners in Franklin (and other municipalities as well.
I know my mayor, Steve Olson concurs with me that the city tax rate is totally meaningless. When I worked in the state Senate he even suggested that the state pass legislation requiring municipalities to clearly and transparently publish their tax levy percentages on the annual property tax bill.
Because it’s the levy, not the rate that matters.
So Steve, talk to your people. Instruct them to stop emphasizing the the tax rate in city literature.
Just as the city has done repeatedly in the past the latest city newsletter opens with a front page piece on the budget. Here’s an excerpt. Read very carefully and see what immediate reaction you have to this paragraph.
New development and increases in property values in the revaluation will offset the increased collections such that the City’s municipal tax rate will decrease from approximately $5.69 to $5.62 per $1,000 of assessed value. In the end, the taxing decisions of the other taxing jurisdictions and variations in assessment impacts between property types and locations make it difficult to generalize how an individual property’s tax bill will change. Nonetheless, overall, including the State School Levy Credit, which the State uses to reduce the effective school districts’ property tax levy, the approximate, combined property tax rates will decrease from $24.09 to $23.28 in the Franklin School District.
OK. Be honest. After reading that you’re thinking, gosh, my Franklin taxes are going down. Why? Because the rates are down.
This is misleading in an attempt to sugar coat the annual Franklin bombshell that will hit your mailbox.
The city property tax levy and school property tax levy both went up. So your Franklin taxes have a good chance of going up, too.
So, let’s try this again, and if you’ve already read this previously on my site, send it to someone else who’d be interested.
THE TAX RATE IS MEANINGLESS!
I’m doing this for the umpteenth time, but with all kinds of new readers and recognizing the old axiom that “repetition is the mother of all students,” this is a must read from a former blogger, posted on October 31, 2007:
It’s the tax levy, stupid…
It’s that time of year again. News story after news story about budgets and property taxes. How are you supposed to read them? Very carefully – and using your head.
So, for just a little help with the “using your head part,” below is a slightly updated repeat of last year’s “It’s the tax levy, stupid….”
Numbers, numbers, everywhere numbers. It’s a field day for the media and local governments when tax time comes around.
If there’s nothing else you remember about your property taxes, remember this: It’s the tax levy, friend, the tax levy. (“Stupid” is memorable, but perhaps a little too harsh and Clinton-esque.)
An individual’s tax payments, are ultimately determined by two things: 1. Total tax levy required by the community 2. A property’s value, relative to the rest of the property in your community.Given even these couple of numbers, the very best way to judge a community’s budget is to look at the increase in the TOTAL TAX LEVY. (well, I suppose in the history of the world, a decrease has been registered – somewhere!)
Some would say you can look at the change in the “total” budget or the “operating budget,” but budgets have lots of different categories, and it’s often difficult to compare apples to apples, one year to the next.
So, Junior, it’s the TAX LEVY, the TAX LEVY.
The fussy variable that wants to confuse property owners, local officials and especially the guys with the ink, is property values. They change. Sometimes it’s new construction, new value added to the community. Sometimes it’s just inflationary increases of existing properties. It all combines to make a big mess of tax numbers and tax season information.
Because of this business of property value, tax RATE numbers are meaningless. Absolutely meaningless. And so, in most instances, are the calculations that tell you the tax on a $150,000 home. Was it $150,000 last year too? And if not, how much did it increase? Depending on your community, your home may or may not retain the same value for a number of years at a time. Therefore…. disregard all information presented to you about tax RATES and taxes on a $150,000 (or whatever) home.
Remember. It’s the TAX LEVY. The TAX LEVY.
Now that we have that down…. one more point to consider. And it’s an important one.
At budget time, look for information about the increase in new construction in your community. This is really important and often a hard number to find in print.
Because unlike increases in value from reassessment of existing properties, new construction is real growth in a community. And if the TAX LEVY rises by less than the increase in new construction, then on average, an individual property owner’s taxes really are going down.
That new construction number is also important because it serves as the Property Tax “Freeze” tax cap if it’s higher (in 2008) than 3.86%. Too many numbers and explanations already. More on the tax cap calculation another day.
-Jo Egelhoff, FoxPolitics.net.