A look at market values versus taxes
Hubbard County Assessor Bob Hansen's mantra is best told in pie charts: Value doesn't always equate to tax. But it can come pretty darned close.
At a presentation Wednesday to the county board, Hansen reiterated the value of lake property to the county coffers, but said those values don't always contribute a commensurate amount of tax dollars to the county.
Still, the "lake effect" carries significant economic clout in property valuations and tax dollars contributed to the region.
The 2011 estimated market value of all property classification groups in Hubbard County is around $3.6 billion, with water-influenced properties accounting for nearly 60 percent of that value.
However, in total net tax, ($28.94 million) those water-influenced properties comprise 53.4 percent of the whole.
Hansen has been giving periodic presentations of the value and tax picture that have become a clarion call for lake activists and politicians.
"I guess it kind of reinforced the value of what we've been trying to say," said Dan Kittilson, president of Hubbard County Coalition of Lake Associations.
"The lakes are a major part of our economy in Hubbard County and that just kind of reinforced it," he said of Hansen's presentation. "We knew that from before, the tax and market value, and how the revenue is pretty much the same. But it's what we've been emphasizing before."
"We want to look out for our lakes," commissioner Kathy Grell said. "They're very, very important to us."
Noting the Coalition of Lake Association members in the audience, Grell said, "We need to work together to make sure our lakes are viable, healthy and the values do not decrease" as they have in other areas of the state.
The value of public utilities increased $26 million, translating to an increase of $523,356 in estimated tax capacity. With increases in all other categories, Hubbard County's tax capacity grew to $819,000 and change, representing a 2.2 percent overall increase.
But Legislative changes to homestead credit could cause a $1.16 million reduction to the Total Market Value of Hubbard County's property.
"If you're a homestead property owner there's some homestead credit that we get that would be over and above that, that was part of the budget process but you didn't have to pay for it this year because it came back to the county as a credit to school districts, as a credit to the township or city," Hansen explained.
"The state has a budget problem right? Next year they've changed the formula of the way they're going to do it," Hansen said.
"Instead of the state reimbursing the counties this homestead credit of $1.16 million, it's going to keep that and use that for other purposes and then, in lieu of that, they've developed a revision to the way the classification rates affect property values so that the homestead property owner will actually pay tax on something less than their estimated market value," Hanson said.
"They're going to have some value that will be excluded from paying tax on and that will shift, reduce our tax base and because we levy XYZ dollars and those dollars are divided by the tax base to come up with a tax rate, is that we will have a lower tax base, which means that everyone's tax rate will be slightly higher."
Hansen equates it to ordering lunch for seven and only six show up. But because seven meals were ordered, the six have to pony up for the additional meal.
"The same thing happens when it comes to property taxes," he said. "We have tax dollars that are needed and a tax base so when the Legislature does something to reduce the tax base it means that the rate goes up for everybody.
That tax extension rate will rise an estimated 2.3 or 2.4 percent, Hansen predicts.
In preparing the pie charts, Hansen said one aspect surprised him. Half of the county's 32 tax districts account for nearly 84 percent of the total net tax, the amount you pay when your tax statement comes out.
It's not that the remaining 16 districts are "dirt poor," but factors such as tax-exempt land also figure in. Much of the northern part of the county is sparsely populated with higher percentages of tax-exempt land.
But the cities of Akeley and Laporte don't have much taxable property, Hansen noted, thus lowering their tax bases.
And numerous exemptions will continue to play a role in the valuation of property for tax purposes, Hansen said. Programs for disabled veterans, rural preserve programs, "This Old House" program and a new plat law will give homeowners relief through the value system.