It is not just the assessor’s fault.
If you read the account in Wednesday’s edition of the Norwell Community School Board’s Tuesday evening meeting, you were told that if you are a taxpayer in the school district and not happy with the increase you have seen in your 2024 tax bill, don’t blame them. The NWCS district rate stayed the same. “You need to talk to the assessor about raising your assessed value,” board member Corey Krug said.
“Our tax rate stayed the same,” superintendent Mike Springer said. “So that didn’t raise your taxes.”
Mike and I talked about this last week as I was working on an overview of the changes in 2024 property tax bills. We disagreed about how tax rates play into the complicated property tax formula, but the issue wasn’t pertinent to my analysis published last Saturday. However, the Tuesday night discussion calls out for further review — if for no other reason to defend an already beleaguered assessor’s office.
First, understand that the assessor is only following set rules. Assessments are one factor of many that go into the process, certainly one of the most significant. Yes, there is some room for subjectivity, and we’ve expressed our frustrations with the inconsistencies that result but the complex assessment process does not provide many options. Additionally, taxpayers can appeal. Additionally, a not-so-insignificant portion of the overall increase this year was the Agriculture land adjustments, of which the assessor has no control.
Meanwhile, taxing units have many options and decisions to make on what their financial needs (or wants) are. Every decision every taxing unit makes ultimately has an impact on your tax bill.
So let’s talk about some tax rate basics.
In general, operating fund budgets for the coming year are discussed and decided during meetings typically held in August and September. Preliminary tax rates are advertised based on a percentage of the current year’s certified assessed value of properties within that taxing unit’s district. The state then certifies the new AVs, reviews the budgets utilizing some set criteria and then computes the tax rate that will raise the required amount (called a tax levy) for each taxing unit.
Meanwhile, each taxing unit can establish their own rates — within some parameters — for the debt service category and any cumulative fund, such as the county’s cumulative bridge fund or the cumulative capital fund that several taxing units have.
That borders on overly simplistic, but two people heavily involved in the process say “OK.”
Of Wells County’s 24 taxing units, 14 of the taxing units’ tax rates are lower in 2024 than they were in 2023. This is due in no small part to the 9.16% increase in the county’s Total AV. The county’s general fund is a good example of the relationship between rates and AVs. The county’s tax rate — which impacts everyone in the county — went down 3.81% but due to the increase in AVs, the tax levy went up almost exactly 5%. (I guess we need to add the term “Gross increase” since the state has certified that, after what remains to me (so far) mysterious adjustments, the 2024 county levy slides in under the 4% Maximum Levy Growth Quotient. See last week’s entry on this page for details.)
The point here is: Is county council leader Seth Whicker saying “we lowered our rate, it’s not our fault”? Short answer: no.
With that 9.16% increase in AV, anything but a decrease in a taxing unit’s rate should be questioned. And that’s where this year’s efforts have been focused: on what has caused significant increases — more than 13% — in the total tax levies. This has led to analyzing the new Bluffton Fire Territory, how school and municipal debt works and what exceptions exist concerning the state’s Maximum Levy Growth Quotient. While you often find explainable answers, sometimes you don’t and have to keep digging. It is worth mentioning that the NWCS’s total assessed value increased 11.53% and now totals more than $1 billion. The school board made a conscious decision to capture some of that AV growth with the $6-million General Obligation bonds that added to the district’s debt service fund, all within state-established limitations, all discussed and approved in open public meetings. If they had not done that, the school’s tax rate would have gone down.
Mike’s slides he shared at the meeting about comparative rates and AVs with 24 school systems in our vicinity have a point. Indeed, they are in line with the observation we made in late 2022 that Wells County’s tax rates are generally lower than our neighboring counties. So I’m not hammering the school district board for spending foolishly or making bad decisions about what the district needs. The money bonded last year for the debt service fund is for overdue improvements needed at Ossian Elementary and the high school campus’ athletic facilities. To be clear, that is my opinion. Yours may be different.
But that is not the issue.
The issue is the claim that decisions made in the NWCS board room had zero impact on their patrons’ 2024 tax bills.
In the case of our home in the Bluffton-LancasterNW district, my wife and I will pay a tax bill 27-point-whatever percent higher than last year. The factors that made that change indeed include a 20% increase in our home’s AV, but there is also the new Bluffton Fire Territory, the county’s decision to reduce the property tax credits and the NWCS board’s decision to issue about $6 million in bonds to fund needed improvements.
Since last Saturday’s articles I have heard from a number of taxpayers who have looked up their changes. One homeowner’s taxes on Sutton Circle (the same taxing district as ours) has gone up nearly 45%.
Homeowners in Ossian should note a 5.28% decline in the town’s tax rate, but significant increases in both the Jefferson and Lancaster townships’ rates. Yes, their school system’s rate stayed the same but it could have been lower if the bond issue had been delayed.
Mike and I have discussed this again in the wake of Tuesday night’s meeting. His conclusion remains: “It is factual to say that there were two variables affecting a tax bill: 1) Norwell’s overall tax rate; and 2) The Net AV. Only one variable changed.”
Agreed. That is indeed a factual statement. But it does not begin to describe the complex property tax formula. As Paul Harvey would say, there’s “the rest off the story.” And it begins with:
It is not just the assessor’s fault.
miller@news-banner.com
