...
In
the last week, I’ve run into two people who have told me similar stories about
discussions they’ve had with friends of theirs whom they know to be
intelligent.
They
and their friends were talking about the upcoming referendum over raising
Muncie Community Schools taxes. On Nov. 5, voters in Center Township will be
eligible to cast a ballot either opposing or supporting increasing property
taxes by 39.39 cents per $100 of assessed value of the property they own.
Each
person said their friends, after talking over the issue, made a statement
similar to this: “Well, if the referendum passes, it won’t matter to me because
our property tax already is at the property tax cap.”
Buzz.
Way wrong response.
We
wouldn’t be having a referendum unless a pro-hike outcome was going to take
local property taxes in Center Township past the tax caps, and levy
additional taxes.
If
you’re at the property tax cap, which 65.5 percent of homesteaded property
owners in Center Township are (homesteaded property are homes in which the
homeowner lives in the home), you’ll keep paying the maximum allowed by the
caps and pay additional taxes.
WHAT
ABOUT THE “AVERAGE”
increase Muncie Community Schools officials keep talking about?
School
folks are fond of saying the “average” home in the school district is assessed
at $75,000 and the owners will pay an additional $65 annually in taxes with rate
hike approval.
The
mean assessed value of a homesteaded property in Center Township is actually
$69,135, but the net assessed value on which property taxes are paid, thanks to
a really generous homestead exemption, drops to $20,200. On this NAV, the additional
taxes MCS wants would be $80 per year.
More
than one-third of all properties by parcel in the township are homesteaded.
But
what about the “average” non-homesteaded property, where people rent the homes
they live in? Another 26 percent of property parcels in the township are in
this category.
The
“average” property in this category is assessed at $57,102, and because those
property owners get far fewer exemptions, the NAV average is $56,965. The
annual increase on these property owners would be $224.
If
the owners don’t absorb any of the increase, average rent would increase by
that much, about $20 a month. If owners are willing, say, to split the
difference, rents would go up $112 per year.
The
highest property tax-paying category is commercial/industrial property, and the
“average” assessment for these owners is $108,000. This is a little deceiving,
though, because the range is really large: from a few hundred dollars up to the
Muncie Mall’s $22 million value.
How
about a specific example?
Lowe’s
Home Center off Clara Lane on Muncie’s northwest side, is almost exactly 1
percent of the total commercial/industrial property assessment total. The
company enjoyed a terrific second quarter of the year, with sales up 10.3
percent over the second quarter of 2012.
If
the referendum passes, Lowe’s will pay $33,721 in additional taxes.
Say
the home center has a 10 percent margin (could be optimistic). To pay the
additional taxes will require $337,000 in additional sales.
Given
how well the year’s going, people might think, good, they can easily afford
more taxes. Yet if the national chain wants to continue profit levels it
currently runs, the layoffs of three part-time workers may be a better option
than trying to sell one-third of a million more dollars worth of goods.
Center
Township has more than 8,000 parcels of commercial/industrial properties, but
93 percent of the assessed value is in 1,400 parcels, and all those are at the
property tax cap maximum.
...See the full article here:
http://www.thestarpress.com/apps/pbcs.dll/article?AID=2013310060026&nclick_check=1
