CHARLES TOWN – Overall property tax rates have risen for the fourth consecutive year in Jefferson County, driven primarily by slipping housing prices.
Homeowners in Jefferson County are currently subject to four different levies that determine their overall tax rate. One covers the County Commission’s expenses. A second covers the school system’s expenses and an excess levy supplements the school system’s income. Finally, there is a levy to pay for school bonds.
For the coming year, about 23 percent of total property taxes will go to the County Commission with the remaining 77 percent going to the school board. The Commission’s levy rate has been set at 26.18 cents per $100 of assessed property value for Class II property – the class to which most housing belongs. For the same class, the school expense levy stands at 38.80, the excess levy at 45.90, and the school bond levy at 4.16.
The school system’s expense levy is set by the state Legislature, and the excess levy is approved by voters in a periodic referendum. School bonds are also passed by voter referendum.
The County Commission’s expense levy is calculated using a special formula produced by the state auditor’s office, said Paul Shroyer, the county’s financial management director. The formula is designed to allow the commission’s revenue to grow 1 percent each year, regardless of increases or decreases in housing prices.
The effect of this formula is that when housing prices rise it tends to push down the rate. When prices fall, the rate tends to rise.
The commission’s levy rate continually declined from 2001 to 2008 as the housing bubble expanded. Then in 2009, as the bubble burst and the recession began to have a substantial negative impact on the price of housing, the trend began to reverse.
“(Assessed property values) continued to go up until 2009 when they actually declined 2 percent,” said Assessor Angie Banks. “There was a delay there because we had a market where all of a sudden there were a bunch of houses for sale, but nothing was selling. Then by 2010 there were a lot of foreclosures, a lot of resales of the foreclosures, and that is when we really started declining.”
In 2010, the decline accelerated to 6 percent, followed by a 5 percent decline in 2011. Banks said the price declines have started to slow after moving downward rapidly in the wake of the housing crisis, but she expects another decline next year.
“There are still a lot of foreclosures and a lot of foreclosure resales out there that will continue to bring our market down. We’re probably going to decline another 5 percent,” Banks said.
Banks points out, however, that the decline is only in the overall assessed value of property in the county. In some areas, she said, some prices are stable or rising.
Banks said each taxpayer’s current assessed property value may be more important for determining whether they will pay more taxes this year than the levy rates are.
“It doesn’t mean that everybody’s tax bill is going to go up just because the levy rate increases. It depends on whether your assessment went down, and how much it went down. If it went up, you will pay more taxes, or if it stayed the same, you will pay a little more taxes. But it’s not a big increase. It was the minimal amount,” Banks said.
Shroyer also thinks the size of the increase has been overblown, pointing out that the commission opted for the minimum rate increase this year.
“I think, based on all the phone calls that I’ve had, that (county taxpayers) think there is a major tax increase at play. But there really isn’t,” Shroyer said.
The total levies have increased 2 percent over last year’s rates, representing an extra 2.26 cents per $100 of assessed value for most homeowners.
However, since both the school expenses and excess levies have remained flat – and the school bond levy has gone up only 0.16 cents per $100 – most of the increase is attributable to increases in the commission’s levy rate. That rate is up 8.72 percent over last year’s rate and 11.37 percent over its 10-year average.
In contrast, the school bond rate is down 42.09 percent against its 10-year average, with the school expense down 2.28 percent and the excess levy up only 0.46 percent.
The overall levy rate remains 2.62 percent lower than its 10-year average, due mostly to decreases in the school bond and school expense levies.