Taking a look at property taxes

Budget season is about complete for area government and we thought it would be interesting to take a look at how property taxes will be affected for next year. We know, very few people find a bunch of numbers "interesting," but Nebraskans love to complain about property taxes, so it is important that we understand how they work.

McCook residents support seven different entities through property tax: City of McCook, McCook Public Schools, Red Willow County, Middle Republican Natural Resource District, Mid Plains Community College, Educational Service Unit #15, and Historical Society.

Each entity has taxing authority over different property -- for instance, the city can only tax property within the city limits of McCook, the county can only tax Red Willow County (which includes McCook plus all rural property), and Middle Republican NRD has authority over Red Willow, Hitchcock, Hayes, Frontier, and part of Lincoln counties. Almost every entity has a mixture of property taxes, state aide, and fees in which to derive funds to operate.

Each entity sets a mill levy to be assessed against property based on $100 in value of that property. Although it is nice to hear that mill levies are being held to last year's rate or maybe even decreasing, that doesn't mean your tax bill will necessarily hold even or decrease from last year. That is because the value of your property may have been adjusted upward, and you are being taxed on a higher-valued property.

So the numbers we wanted to examine were the total dollars each entity requested from property taxes compared to last year. In an effort to keep the numbers at a minimum, we focused on the City of McCook, Red Willow County, and McCook Public School -- the three biggest users of McCook residents' property tax dollars.

The city is the real hero in our analysis. The increase in property tax dollars requested by the city was $8,893, or .89 percent. The city will be using $1,007,768 in property tax funds for 2012-13 fiscal year compared to $998,875 in 2011-12. The tax levy will remain the same at .319044.

It should be pointed out, that the city is holding its property tax request to less than a one percent increase, while at the same time, they are building a new municipal facility and they have decreased the tax on landline telephones.

McCook Public Schools will be using approximately $359,000 more from property taxes next year, an increase of 6.29 percent. They will be using slightly more than $6.06 million in property tax dollars in 2012-13; compared to $5.7 million in 2011-12. However, the mill levy for school property actually went down .02, from $1.19 per $100 in value, to $1.17.

Red Willow County will be using about $812,000 more in property tax funds next year, an increase of about 28 percent. The county's total property tax requests for 2012-13 is $3.715 million, compared to $2.903 million last year. The mill levy went from .380743 to .443126.

The county will have new expenses associated with operating a jail, both a temporary holding facility and the new permanent facility. Those new expenses have already begun, as jailers are being trained now to be ready for the City's move out of the jail business later this year. That accounts for $254,510 of the $812,000 increase. Those increases are permanent and will likely rise even more as the years go on and as the county assumes operational expense for the newly-built jail.

The county also had to deal with the Hillcrest bond payment issue, and budgeted $330,000 to "buy Hillcrest some time" to get their financial house in order. The county budgeted to make the two bond payments (one this November and the other one in November 2013) on a 1994 Hillcrest construction project. That increase should be a one-time occurrence, as Hillcrest management and board works through the issues that led to the cash short-fall and restores the much-needed facility to financial health.

If you take out the new jail expenses and the two bond payments, the increase in property tax requests for Red Willow County is $227,500 or about eight percent.

Because each entity has different taxing authority, revenue sources, and responsibilities to deal with, it is very difficult to have an apples-to-apples comparison. It's almost impossible to have a discussion about property taxes without completely boring anyone who has an adversity to numbers. Maybe that is why it's easier for Nebraskans to simply complain about their property tax bills.