COMPARING TAXES, OR “APPLES AND ORANGES”

Several weeks ago I wrote about the County Budget. I noted that the County tax rate had once again been reduced for the 7th consecutive year. Since then I have had conversations with several taxpayers who disputed that claim. While I know what the tax rate is, I also know that what each taxpayer actually pays depends on several factors besides that “tax rate” set by the County Legislature. I decided to check our tax history. Fortunately, my wife keeps excellent records of our household expenses (including taxes). She was able to provide me with copies of tax bills on our personal residence. Here is our personal “taxing” experience. You may find it interesting.

My review covers 2014, 2015, 2016 and 2017. We have not made any changes in our residence over those years that should have resulted in a change in assessment. However, for those years our assessment was $74,200 (2014), $74,400 (2015), $76,900 (2016), and $76,900 (2017). From my personal perspective the property was exactly the same, but for assessment purposes it changed in 3 out of 4 years.

According to my tax receipts the “Equalization Rate” for my property changed from year to year. The Equalization Rates were as follows: 95% (2014), 100% (2015), 98% (2016), and 96% (2017). The County Legislature, Town Board and local Assessor have no control over the Equalization Rate. That is done by the State Office of Real Property Tax Services using certain formulae it has developed in accordance with State statutes.

The full value County Tax Rate for real estate taxes for those years were as follows: 2014= $16.70, 2015= $16.46, 2016= $16.29, and 2017= $16.05. It went down every year. However, for my residence the tax rates for those 4 years were as follows: 2014= 16.734174, 2015= 15.939593, 2016= 15.935622, and 2017= 15.755141. In 2014 my “equalized tax rate” was higher than the full value County tax rate, but in all other years it was lower than the County rate. However, the County has absolutely no control over the Equalized Tax Rate.

For most taxpayers the bottom line is how much they paid in County real property taxes. This amount is impacted by the factors referred to in the 3 preceding paragraphs: the property assessment, County tax rate, Equalization Rate, and equalized County tax rate. For those 4 years I paid the following amounts: 2014= $1,241.68, 2015= $1,217.78, 2016= $1,225.45, and 2017= $1,211.57. That means my county taxes went up in one year, and down in 2 years.

There is one other important factor that needs to be noted. My January tax bill covers several tax bills, besides the County taxes. My bills includes charges for the Town of Caneadea, Caneadea Fire District, Houghton Light District, Houghton Sewer District, and Houghton Water District. The total amount that I paid each year included much more than my County taxes. My total payments to the Tax Collector

were as follows: 2014= $2,367.99, 2015= $2,316.53, 2016= $2,251.44, and 2017= $2,240.70. I was pleasantly surprised to see that my total bill has gone done slightly each year. Unfortunately, that has not been the experience for all other taxpayers.

Several years ago I was involved in a conversation regarding food prices. Several individuals complained about paying higher prices for milk. A dairy farmer participating in the conversation took exception, and noted that he was getting paid less for the milk he produced than he had the year before. Everyone wondered why the price was going up when the farmer was being paid less for the primary ingredient in the product. There were obviously factors beyond the farmer’s control. The same is true about real property taxes. When the Legislature lowers the County tax rate, it should show up as lower taxes on your bill. The bottom line is that taxes are lower than they would have been if the Legislature had increased the tax rate, or left it unchanged. I hope this review helps clarify this complex topic.

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