Legislative cuts require county tax hike, commissioners say
August 19, 2002
Recent legislative action to reduce some taxes has caused Hill County to raise its property tax rate, county commissioners said today.
The county budget, which commissioners were required to adopt by 1 p.m. today, will include a tax increase of about 6.25 mills. That increase makes up for tax revenue lost when the 2001 Legislature passed a law giving homeowners a 31 percent exemption on the value of their homes, Hill County Commissioner Doug Kaercher said.
The county has to make up for that lost revenue to continue providing services, he added.
"Those services are still mandated to be supplied," he said.
The three commissioners held public hearings last week on the budget in preparation for today's vote.
Last year the county increased its property tax rate to make up for revenue lost when the Legislature reduced taxes on business and agricultural equipment. Kaercher said he thinks the Legislature passed the home exemption in reaction to increased property tax rates adopted by counties around the state.
The exact effect of the 6.25-mill increase, about an 8 percent increase, will vary depending on the property. A mill equals $1 of tax for every $1,000 of taxable value.
"Some are going to go up and some are going to go down," he said.
The county portion of most residential tax bills will be about the same or a little lower because the tax increase will be offset by the 31 percent exemption, he said. The taxpayers who will see the largest increase in county taxes will be owners of large tracts and commercial property, although that increase should not be much, Kaercher said. The county tax does not include property taxes for schools and city services.
When business owners are no longer paying as much in taxes for their equipment, someone else, like homeowners, has to make up the difference, Kaercher said. When the homeowners are given a tax break on their property, someone else, like business property owners, has to make up the difference.
The amount of taxes charged on a piece of property depends on the type of property it is. The taxable value of agricultural land, for example, is figured at a lower rate than that of residential land. The same tax rate applies to all, once the state computes the taxable value, Kaercher said.
Not every county will have to raise taxes because of the homestead exemption, he said. Some counties are experiencing sufficient growth and new construction to offset the loss of revenue, and homeowners will get a smaller tax bill because of the exemption.
In Hill County, the total taxable value dropped by $700,000 in the last year, mostly because of the homestead exemption. The county has reduced its budgetfrom about $15.3 million last year to about $14.7 million.