Tuesday, December 8, 2015

Tax Impact of the New Referendum

Although the calendar as I write this reads December 8th, the view and temperatures outside are more like October; nonetheless, I am confident that winter weather will be on its way sooner or later and with that comes the potential for school closures.  As we have in the past, the district intends to provide timely updates to students, parents, staff, and community members via our emergency telephone system as well as by posting information on all of the major TV and radio stations in the area. 

Secondly, I wanted to continue to address various aspects of the upcoming levy override referendum which is planned for this spring.  As a reminder, the new levy override referendum will not be scheduled to begin until the 2017-2018 schoolyear after the current one for $790,000.00 per year expires.  We will also be seeking $110,000.00 more per year in the new referendum largely based on a conservative inflation estimate of about 1.6% per year over the life of the current referendum (an average of the CPI and COLA mentioned last month) for a total of $900,000.00.  It was incorrectly reported in the November 18th edition of the Barron News-Shield (available here: http://www.news-shield.com/news/top_stories/article_b7450576-8dfe-11e5-8285-eb91f26ebc79.html) that if approved, the new referendum would cost taxpayers $175 more per year on a $150,000 home.  As you can see from the table below, that is in fact NOT the case; based on our projections taxpayers should see a very slight increase in property taxes to schools ($44.25/year on $150K property) in the first year (17-18) of the new referendum followed by a slight rise over the five (5) year period back to a mill rate level similar to this year’s (2015-2016).  Please note that this slight rise predicted is after a net decrease of $106.05 in the last year of the $790,000.00 referendum; therefore taxpayers will actually pay roughly $66 LESS per year in the first year of the new referendum versus their costs this year.

Fiscal
Year of
Referendum
Mill Rate
Tax Impact on
Difference
Year
Referendum
Amount

$150,000
Year to Year
2015-16
4
$790,000.00
12.120
$1,818.000

2016-17
5
$790,000.00
11.413
$1,711.950
-$106.05
2017-18
*1
$900,000.00
11.708
$1,756.200
$44.25
2018-19
*2
$900,000.00
11.846
$1,776.900
$20.70
2019-20
*3
$900,000.00
11.968
$1,795.200
$18.30
2020-21
*4
$900,000.00
12.077
$1,811.550
$16.35
2021-22
*5
$900,000.00
12.171
$1,825.650
$14.10






*Proposed referendum




This chart assumes property valuation remaining constant


As noted, these are projections based upon all available information; since we have held property values flat in our projections, it is very likely that property taxes will actually decrease more significantly over the life of the new referendum if property values continue to rise as they have the last two years.  This then translates to lower mill rates than predicted above.  As mentioned previously, I will be continuously providing information over the next several months regarding the referendum. 

As always, please feel free to contact me at any time.  Happy Holidays!

Sincerely,
Craig G. Broeren
District Administrator
715-537-5612 ext. 402