Tax Increase Advances

Last night County Council’s Budget and Finance Committee advanced a 1 mill increase in the property tax, a 21% increase that defies explanation. The Committee wants to raise taxes in the face of a reassessment that, because of state law applying to counties of the second class, will require millage rates to be revenue neutral. The law permits a separate tax increase vote that would allow the County to take in 5% more than the revenue neutral amount. Anything above that requires court approval.

Of course, many on Council might be hoping that the state is going to somehow intervene and stop the reassessment ordered by the state Supreme Court. The incoming County Executive has stated he will not mail out assessment notices. So County government is treating 2012 as a non-assessment year, as silly as that sounds, and the only requirement for a tax increase would be an affirmative vote of 10 of the 15 Council members. Perhaps the Council is hoping to find a judge that will find the 1 mill increase permissible by outright ignoring the fact that the County and Judge Wettick are meeting weekly to discuss the progress of the reassessment.

A quick word on the mechanics of the tax: the County’s operating budget has four main funds-general, debt service, liquid fuels, and transit support. Only the first two partake of any property tax revenue. Right now, at 4.69 mills, the general fund gets 3.6852 mills (equating to 79% of the total millage) and the debt service fund gets 1.0048 mills (the remaining 21%). The 1 mill increase and the allocation of millage would stay roughly the same at 80/20. Council is free to change that ratio at any time by majority vote.

Enacting a 1 mill increase now would seem to muddy the waters, to say the least, since taxing bodies don’t know how much the reassessment will net. All in all a silly notion.