William Connors <weconnors07@yahoo.com> wrote:
Dear School Board Members:
I read in the October 25 edition of The Review that
the school district’s estimated property tax rate on
equalized assessed value (estimated full market value)
will be $9.80 per $1,000, down from last year’s rate
of $9.83 per $1,000. Do you know whether this will
result in a property tax increase or decrease for
property owners? If not, how can you make an informed
decision about next year’s property tax levy? Without
knowing the property tax impact, how can citizens
provide meaningful input at the meeting on Monday,
October 30?
The problem is that the amount of property tax a
property owner pays is calculated based on assessed
value, not equalized assessed value (estimated fair
market value). Unless there is a revaluation, the
assessed value of the vast majority of properties
stays the same from one year to the next.
Consequently, the property tax rate on assessed value
might increase, even if the property tax rate on
equalized assessed value decreases.
The following scenario illustrates this point. For
2005/2006 property taxes, a house in the City of
Evansville with an assessed value of $100,000 had an
equalized assessed value of $97,837.78, because last
year’s assessment ratio was 1.0221. For 2006/2007
property taxes, that same house will again have an
assessed value of $100,000, but the equalized assessed
value has increased to $101,290.72, because this
year’s assessment ratio is 0.987257273. If one
applies the 2005/2006 school district rate on
equalized assessed value, $9.83, to last year’s
equalized assessed value, the school district property
tax is $961.75. If one applies the estimated
2006/2007 school district rate on equalized assessed
value, $9.80, to this year’s equalized assessed value,
the school district property tax is $992.65, an
increase of $39.90 (3.21%).
The calculation of property taxes actually is more
complicated than that. In the actual calculation,
total equalized assessed value in the City of
Evansville is divided by total equalized assessed
value in the school district, and the resulting ratio
is used to allocate the same percentage of the school
district’s levy to property in the city. Then the
part of the school district’s levy apportioned to the
city is spread on the total assessed value of the
city, resulting in a property tax rate on assessed
value. One would need to do this calculation to be
able to compare the school district’s rate on assessed
value in 2005/2006 to the rate in 2006/2007, and
factor in the impact of tax increment financing
districts, to know precisely how much school property
taxes on properties in the city actually will
increase. But it appears there will be a property tax
increase, even though the rate on equalized assessed
value is anticipated to decrease.
Bill Connors
622 E. Countryside Dr.
Evansville, WI
882-4773
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