News

Reassessment 2009 county budget allows for only 10 percent property-tax hike as millage rates take big drop

July 5, 2008

Taxing bodies not in for windfall

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
Jennifer Learn-Andes on Facebook   |   @TLJenLearnAndes on Twitter

Luzerne County budgeted $70.3 million from property tax this year.

The county is allowed to only collect that amount plus 10 percent in 2009 – the first year of the reassessment.

County officials are trying to make the point because many property owners are convinced that taxing bodies will receive windfalls from the drastic increase in assessed values.

Taxpayer George Kochis brought up the subject during Monday’s commissioner work session.

“If you are making a lot of money, I think the taxpayers ought to know,” he told commissioners.

County officials said millage rates must drop dramatically when the new assessed values take effect next year. That goes for school districts, the county and municipalities.

For example, the county millage, currently at 94.9 mills, is expected to drop to about 5 mills after the reassessment. A mill is $1 tax for every $1,000 in assessed property. That means someone with a home worth $150,000 after reassessment would pay $750 in county taxes at 5 mills.

The county’s reassessment company projected the new, lower millage rates when calculating the “after” portion of the before-and-after tax estimates on the new assessed value notices so the amounts would be realistic.

Reassessment official Tim Barr, of 21st Century Appraisals Inc., said he projected the new rates to help taxpayers understand and prepare for the new tax bills. He said he can’t release the new rates because they are not final.

The total millage package – school, county and local – currently ranges from around 278 mills to 465 mills, depending on the location. Barr estimated the package will range from 10 to 25 mills after reassessment. He said the millage rates won’t be finalized until the county certifies the new tax base on Nov. 15.

The reason: The new assessed values, which must be mailed by July 1, could go up or down after informal reviews, formal appeals, court challenges and participation in the clean-and-green program for the owners of parcels that are 10 acres or larger.

“The point is revenue must stay about the same for each taxing body, and the millage will be whatever amount it takes to produce that amount of revenue,” Barr said.

Though 21st Century will assist, it’s ultimately up to each taxing body to comply with the 10-percent limit because the county doesn’t have policing authority, Barr said.

The county’s 10-percent increase would amount to $7 million.

Taxing bodies must make it clear to the public how much of the new millage falls in the 10-percent increase. State law was changed several years ago to require taxing bodies to vote separately on the break-even millage and the tax increase.

During the work session, taxpayer Ed Chesnovitch cautioned that the future tax bill estimate on the assessment notices could increase if many property owners receive reductions.

Commissioner Greg Skrepenak said the future tax bill could also decrease.

Barr said he does not believe bills will increase because he estimated on the high side, expecting some reductions from the original values.

Skrepenak cautioned that taxing bodies will be free to raise taxes beyond the 10 percent after 2009.

Some taxing bodies, including the county, are currently at their maximum millage ceilings, but the ceiling is raised after reassessment.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

Tweet	Follow @TLnews