Info on property tax increase
Submitted by admin on Wed, 05/23/2012 - 6:37pm
A reader wrote in today asking about the property tax hike the Carson City Board of Supervisors approved unanimously last week. What follows is a breakdown:
The property tax rate will go from $3.1872 to $3.66. If you do the math, that works out to a 13 percent increase. However, state law limits the amount of increase that homeowners have to pay to 3 percent per year, 6.4 percent on commercial properties. They estimate that taxes on average will increase 3 percent next year under this new rate, and account for about $3 million more than they would under the old rate.
Even though the rate will go up, some people could actually see their tax bill go down because of the declining property values. One of the reasons the city wanted to raise it is because without an increase, about one-third of all homeowners here would see their bill go down next year. Tax bills would go down because the dropping values are finally catching up to where the cap limited increases for the past few years when values were rising. Assessed valuations tend to trail market value by a year or two, so in terms of assessed value, it is just catching up with the crash.
Having the taxes go down would be nice for us homeowners, but not so much for the city. It still takes the same basic number of dollars to provide fire, police, etc. no matter what the real estate values are. Because sales tax revenue dropped off after 2007, the city budget has already shrunk 7 percent in total dollars since that time.
Seven percent doesn't sound like much, but that doesn't account for the mandated increases for things like PERS, health insurance, workers comp and pass-downs from the state that the city had no control over. Once you factor in those items, the city has cut back spending on services by 15 percent.
That's not to say the city couldn't have found some additional cuts so as not to increase taxes, or at least not so much. For instance, they could have chosen to reduce services, or cut back employee hours like the state has done.
But, if property values decline further, it would continue to be a problem for the budget in the coming years.
More about the tax increase here.
