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Pope County Tribune - Starbuck Times
Written by Steffanie Dahlseng   
Thursday, 29 September 2011 10:25

The steps to taxpayer sticker shock


Pope County taxpayers could be in for a rude awakening in 2012 with the potential for property tax increases totaling more than 20 percent.

The increase is a combination of the needs of several local taxing authorities to increase tax revenue, but the problem started with the state budget bills that were passed in special session this summer.

State lawmakers eliminated the market value homestead credit in an action known as the homestead market exclusion during special legislative sessions. According to Sen. Joe Gimse, this saved the state $365 million for the 2012-13 biennium and $538 million for the 2014-15 biennium.

The new homestead market exclusion reduces the amount of taxable market value to compensate for the elimination of the market value homestead credit. Therefore a property with an estimated market value of $141,100 will only have a taxable market value of $116,559.

This does not necessarily ease the burden on the taxpayer, because that reduction in taxable value will now be absorbed countywide. Pope County Assessor Wayne Anderson estimates that this change will result in a 5 percent increase in the mill rate or base tax rate for all Pope County property tax payers.

Anderson said that in Pope County property values increased between 2002 and 2008, but the mill rate decreased. Anderson added that in general property values for agricultural land in Pope County will be going up in 2012, and Starbuck will be seeing some property value decreases due to recent market decreases.

Anderson said that in 2012 some property owners may see their property value decrease, but with increased mill rates and levies their taxes may still increase. He cautioned that individual taxpayers will not know the true change to their taxes until Truth in Taxation letters are mailed out in December.

In addition, the elimination of the market value homestead credit reduces the taxable revenue for local taxing authorities. Anderson said, "Things like this are going to force the local governments like counties and cities to work better for the good of the taxpayers."

Earlier this month, the Pope County Board of Commissioners passed a 14.99 percent preliminary levy increase. However, this levy could be reduced before December. Interim County Coordinator Jim Thoreen and Human Resources Director Jackie Stevens will be meeting with all department heads and combing through departmental budgets line by line to find cuts in an effort to reduce the levy.

In recent years, Pope County has relied on reserve balances to keep levy increases low and balance its budget. However, Stevens said, "Current reserve balances, they are not healthy." This year the county will have to make budget cuts or raise taxes to balance its roughly $15 million budget.

The largest piece of the county's fiscal puzzle is personnel. Labor negotiations are already underway. Many of the proposed budget cuts will need to be negotiated with union representatives including cuts to cost of living increases and step increases.

Stevens said of the negotiations, "I hope that we are able to come to middle ground and have as little impact as possible."

Another preliminary levy increase was passed by the Pope County Housing and Redevelopment Authority/ Economic Development Authority. That levy was increased from $200,000 in 2011 to $300,000 in 2012. However, the authority has the ability to reduce its levy before December.

Local Government Aid cuts will force most cities to raise their tax levies. Glenwood increased its preliminary tax levy from $978,904 in 2011 to $1,050,000 in 2012. However, the city is expected to take several measures to reduce that preliminary levy before the final level is due in December.

Starbuck's levy of $800,000 has not changed since 2009. Westport's levy will remain the same also at $4,725.

Cyrus passed a slight increase in property taxes for its preliminary levy. Lowry increased its property taxes slightly from $95,500 in 2011 to $98,750 in 2012. Sedan's preliminary levy represents an increase of 10 percent. Long Beach also had a slight increase from $105,400 in 2011 to a preliminary 2012 levy of $106,400.

School districts are expected to increase levies slightly, but most school districts like Minnewaska Area Schools are expected to borrow a little more than usual to shoulder the burden of a smaller taxable value.