After another year of falling home values, some Treasure Valley homeowners are again voicing their anger over higher property tax bills. Others, meanwhile, are actually paying less — but at the expense of dramatic decreases in the assessed values of their homes.
“I personally took about 200 calls from people,” said Canyon County Deputy Assessor Joe Cox after residents began receiving notices for the first half payment on their 2010 tax bill, due Dec. 20.
What made the difference? Budget decisions and the not-always-equitable real estate market.
Unlike income and sales taxes, which are collected at set rates, property tax levy rates are determined after budgets are set.
Cities, counties and other local entities decide how much they will spend, and then the burden is spread among all the property owners in their areas — based on assessments that are the county’s best guess as to how much the properties were worth on the previous Jan. 1.
So your final tax bill depends on:
1) Whether homes in your neighborhood lost more or less value than others.
2) How many taxing districts you live in and how much their budgets grew or shrank.
And after values have dropped as much as they have, No. 1 is having a bigger impact than No. 2.
Take the Ada County Highway District’s 2010 property tax budget request of $31.6 million. That’s identical to its 2009 request, but lower housing values required that the district’s levy rate rise by a whopping 16 percent in order to generate the same amount of revenue.
LOCATION, LOCATION, LOCATION
The median decrease in Ada County housing values for 2010 was 14 percent — but that varied by community, to as high as 18 percent in Eagle. (The median value means half of all homes saw decreases greater than the median decline in their district, and half saw lower decreases.)
A home whose values fell by less than the median decrease was likely to see property tax increases. Homes with higher percentage decreases in their assessments would have a chance of getting a lower tax bill, Ada County Assessor Bob McQuade said.
Plus, there are 38 taxing districts in Ada County, including cities, counties, and school, fire, highway, library, sewer, emergency medical and mosquito abatement districts. In 2010, 25 of those districts increased their budgets.
Of course, those districts have widely different budgets. “Twenty percent of the districts collect about 80 percent of the property taxes,” McQuade said.
The larger the district, the more impact it has on overall property taxes.
For example, the city of Boise increased its budget by more than $4 million in 2010, pushing its levy rate up by 19 percent, according to the assessor’s office.
The result: A home that paid $586.83 on $100,000 in taxable value a year ago received a $13.51 city tax increase — even after its value dropped by the city’s median decrease of 14 percent to $86,000.
City spokesman Adam Park said the council took the full 3 percent property tax increase allowed by law in order to maintain its existing level of services.
“The 2010 Citizen Survey shows almost 70 percent of residents say they are getting their money’s worth in terms of value of city services for taxes paid,” Park said.
Under Idaho law, taxing districts can increase their property tax budgets by 3 percent each year, along with an additional amount for growth and new construction.
However, a provision in the law allows districts that took less than their 3 percent increase in past years to go back and recapture that money in subsequent years.
That’s what Nampa did in 2010.
The city took its 3 percent property tax increase, plus another 2 percent it left on the table a year ago. So the city’s budget increased by $2.9 million and its levy rate rose by 23 percent — more than making up for Canyon County’s median 15 percent decline in housing valuations.
Let’s go back to that hypothetical home, but put it in Nampa. Valued at $100,000 in 2009, it had a city property tax bill of $828.28. The 15 percent median decrease dropped the home’s taxable value to $85,000 — and still the homeowner owes $863.26 to the city for 2010.
And that’s before taxes owed to other entities such as Canyon County, the Canyon County Highway District, the Nampa School District, the Nampa Highway District and the College of Western Idaho.
Cox attributed the jump in overall property taxes to the city’s decision to increase its budget by $2.9 million.
“What the city did was legal; I just don’t know that it was prudent, because it’s putting a heavy burden on taxpayers,” Cox said. “With a lot of people struggling to stay in their homes, it was a bad time to raise taxes.”
Nampa Mayor Tom Dale defended the city’s decision, arguing that it was either increase property taxes or cut police and fire protection.
“These are services that people have come to expect, and which have to be met,” Dale said. “We’ve delayed capital projects, street maintenance and not filled open positions. There was no place left to cut.”
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Comparison of selected property taxes and school districts.