Guest Post: Local Governments Move The Property Tax Goalposts

As the legislature battles with itself over how to provide property tax relief, local governments are showing once again that they are the ones really in control.

Out of Williston comes a story about how residential property values will climb 15-35% on local residents.

As the article states: “But Gooch-Egge cautioned that the increase in property values does not automatically mean that taxes will be higher for people living in the city, with tax decisions made by the city commission.”

This is true, but it is dependent upon local government reducing the mill level by as much as values went up.

How likely is it that local government will reduce their mill levies by 15-35%? The answer is: “Not very likely.”

The story is the same in Dickinson where: “Overall, homes in Dickinson have been assessed on average 26 percent higher than a year ago while commercial real estate went up a whopping 42 percent.”

But in the story about Dickinson there is a quote from Dickinson City Assessor Joe Hirschfeld which is flat misleading:

“Historically, we had a larger-than-typical adjustment percentage this year,” Hirschfeld said. “Valuations, although utilized for taxes, don’t really have to do with taxes. Valuations are to help the mill rate and the budgets interact. For those concerned about their taxes, they need to be speaking to city commissioners, county commissioners and school districts about their budgets and making sure those budgets stay under control. An increase in values does not always mean an increase in taxes.”

Hirschfeld is trying to claim that valuations don’t have anything to do with taxes – that is flat wrong – and given his position as City Assessor he should know better. Mill rates are applied to valuation, so if your valuation goes up and your mill rate doesn’t go down by as much, your taxes will go up.

This is the obstacle that the legislature faces on property taxes – local government officials who do very little about their own property tax burdens while the state does what it can to “buydown” property taxes with more education funding. And to make matters worse, local officials publicly mislead homeowners about the how property taxes are calculated.

What is the legislature supposed to do when local government is working against their efforts???

For as long as the legislature has tried to reduce property taxes by pumping more state money into education – cities, counties, and park districts have done little to nothing to make thing easier – and in fact many times they try to use those state funded reductions via education to grab more for themselves.

The legislature needs to come up with some real reform measures for property tax, or else all the money they are sending down to school districts will be for nothing.

Perhaps it is getting to be time to once again treat local property tax as a local issue – after all, local governments do not seem to be all that grateful for the state attempts so far.