Wednesday, December 10, 2008

Uncapped taxes on your bill--Is Rock Valley's 7.6% increase too much?

Talked today with Sam Overton, Rock Valley College, Chief Financial Officer. The following is a synopsis of the major items discussed and my personal analysis of Rock Valley's levy request. The numbers are derived from fact sheets from Mr. Overton sent via email.

1. Rock Valley is not subject to tax caps because the college has taxpayers within Ogle County and that county is not subject to tax caps.

2. As far as taxes, the administration's long term goal is to keep a constant tax rate for Rock Valley College. That is, the combination of (a) the corporate and special purpose property tax for Rock Valley and (b) its debt service and public building commission taxes, should not change. A rate of .4500/100 is the goal.

3. The projected combined rate for 2008 tax year (amount paid in 2009) will rise from .4421/100 to .4534/100 (2.6% increase). There is a projected (best guess estimate) of a 5% increase in the valuations of housing. Thus a 7.6% increase in an individual homeowner’s taxes is anticipated. For a house evaluated at $100,000 in 2007 the rate increase and assessment valuation increase would mean that taxes to Rock Valley College would climb from $147.37 to $158.68, an $11.31 increase.

4. I have attempted to review Rock Valley’s combined rate over time and compare it with the college’s goal in item #2—combined rate shall be held constant.

% Increase----------.07%----.05%-----(1.3%)---4.23%---(5.13%)---2.56%-------0.74%

Here is what I found out. Only in two years were there actual decreases in rate (2005 and 2007).The average combined rate is .4500/100. The 2008 rate of .4534/100 is less than 1 per cent different from the average rate.

5. Taxes are collected in multiple counties all with different payment dates. The college is on July 1 fiscal year and thereby a single year’s tax revenues are recorded in two fiscal years. It appears that the college budgets for a revenue stream from taxes at the .4500/100 rate.

A buildup of the combined rate—the multiple tax rates for various funds—is shown on one of Mr.Overton’s attachments. I am attempting to view the individual rates to see which increased the most. Thus far of the .0382/100 increase, most of it is in the Protection, Health & Safety tax-- this increased from .0377 to .0491, a 30.24% increase or a .0114/100 increase. The Protection, Health & Safety appear to vary a great deal from year to year. Debt Service levies increased from .0924 to .0955 or .0031/100 of the increase. Thus far I have accounted for 38% of the rate increase.