November 2nd, 2012 Budget Update – Councilor’s Matt Price, Jeff Papa, Steve Mundy, Candace Ulmer passed a Resolution to cap our 2012 Budget. Union residents will see an estimated $.07 increase compared to the possible .20 to .34 increase. We still need to cut our budget more.
October 21st Update – The Town has filed a Levy Appeal to INCREASE the amount of taxes by some $4.6 million. I don’t agree. It is bad policy to increase across the board salaries by 7.1% the last two years and then ask for an appeal of the upper limit of taxes the Town can assess.
The vote on the 2012 Budget, including this increase, will be on Halloween evening, October 31st , 7PM at the Town Hall.
The basics … it used to be that each taxing entity (county, township, town, library, school) would create their individual budget, look at the assessed property value in their respective area and divide the amount they wanted in the budget by the assessed property value to determine the tax rate. We all want good schools, good fire protection, great library and so on. So individual budgets were fairly easily justified.
None of the individual taxing units looked very much at what the other units were budgeting, sort of like each dog had their own food dish. How much was in the dish was however much the Township Board, Town Council, etc. was OK with and approved in a public meeting. Pretty soon with more and more food going into each dish, dog food got expensive and the dogs were getting fat.
Enter Property Tax Caps. The tax caps turn the entire math equation around. Instead of computing the tax rate from what you wanted to spend divided by the assessed property value – the rate is fixed (1%, 2% or 3%) and therefore the total amount raised from property taxes in the county is fixed each year, only varying year to year with the assessed value.
Now there is only ONE dog dish and only a fixed amount of dog food. When the dish is empty, dinner is over until next year. So what happens if there wasn’t enough food for all the dogs, well each dog will just have to go away a bit hungry and make do with what they had.
Whether you agree with tax caps or not, probably you’re wondering how did we get into this in the first place. Who was in charge of how much food went into the dish in the old system? Why were the dogs getting fat? Well to a degree, its your fault. Remember “… approved in a public meeting.”? But you do have a pretty good excuse.
“Government” will tell you that you had opportunity to look at the legal ad (a fine print ad published twice) in the newspaper, make sense out of it, and probably had at least one opportunity, if not two, to come to a public hearing and comment on the budget. There are a couple of problems with this process (here are your excuses).
First the “budget” must be advertised way before the actual assessed property value is known. So we don’t know how big the dog dish is going to be. We have to guess at that number and we will guess low, because that will make the tax rate number larger and the tax rate number can’t increase after the legal ad is published (that’s the law). Same with the amount budgeted, but we will guess high here since we can’t increase that amount after publication either (the law thing). We want to be sure we have enough food for the dog dish, whatever size it turns out to be.
These estimates, biased as they are, make it really hard, for anyone, to make an intelligent comment or ask a question. This year the legal notice indicated that all property in Zionsville would drop 30% in value. That inflates the tax rate, which you have to divide out for yourself since the tax rate isn’t included in the legal ad. Suffice to say that I think this process is broken, but it is in the state statutes so this is the process we have to deal with.
The “certified assessed values” have recently been defined (they did go down but not by 30%), so we pretty well know how big the dish is. I’ll keep you posted as to how much food the “town dog” thinks he will need the dish. Just remember that if all the dogs run out of food in the dish and are still hungry (budget is larger than “tax capped” revenue) that is just too bad and they all will have to make do with less.
(Apologies if you are getting tired of this dog food metaphor but this is about the best way I can think to explain it.)
Update as of October 21st.
While the 2011 budget is still getting some final “tweaks” it looks like the probable rates will be as follows
- Union Rural 0.2850
- Eagle Rural 0.2109
- Urban Zionsville 0.5438
Keep in mind that the above rates are just for Zionsville, you will still have county, school and library taxes in addition. For comparison the 2010 rates were
- Union Rural 0.2834
- Eagle Rural 0.1696
- Urban Zionsville 0.4743
