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The largest tax increase you never heard of

by ED Morse
| September 18, 2010 9:00 PM

Were you aware of your tax increase in the new county budget? Were you misled by promises of 'No Tax Hike'? The County Commissioners scheduled a budget hearing on Aug. 18, 2010. The county then announced there were 'some corrections' and re-scheduled the hearing on Sept. 1. On Aug. 28, the Cd'A Press ran a front page headline that proclaimed "No Tax Hike." In analyzing the changes to the two budgets, the county raised the taxpayer burden by $1.484 million in the second budget.

Kootenai County is in a recession, with declining personal income, a declining real property tax base, and declining retail sales. All economic indicators are depressed. With a declining tax base due to the real estate market collapse, if government spending is not cut, taxes increase. The first county budget was $71,872,236, which included taxes of $36,567,087. The second budget totaled $72,151,802 and required $38,051,581 in taxes. Tax revenues were increased by 4.1 percent in the second budget. It was apparent the county was raising taxes, but the public statements and headlines were to the contrary.

In the Aug. 28 Cd'A Press, Commissioner Tondee is quoted as saying, "It feels good. That's what we were shooting for the whole time, to not have the tax increase." The taxpayer funded portion of the county budget has expanded each year, as shown in the table below. Since 2007, taxes levied have increased every year. Taxable values are now declining. When the tax base is declining, the budget must be cut or taxes increase, (except for new growth). Property taxes are an increasing portion of the county budget, increasing from 42 percent in 2007 to 52 percent in 2011. I attended the budget hearing because it was not possible for the commissioners to adopt the published budget, and not raise taxes. The second budget increased taxes by $1.484 million, while proclaiming no tax increase.

At the budget hearing, Finance Director McDowell described declining county fee revenues, more taxes for the budget, higher levy rates next year, and the resulting higher taxes. For a residence with a homeowner's exemption, taxes will increase 13 percent. In 2011, the increase in tax rate is 17 percent higher per $100,000 of valuation. For non-residential property, the county tax increase will be about 17 percent. These projections assume a further decline of 15 percent in property values in 2011 from 2010 levels, and if your property value does not decline that much, your taxes may increase more. The taxpayers deserve clear and complete budget disclosures. I requested the commissioners re-schedule the budget hearing because taxpayers were misled by the 'No Tax Increase' headlines in the paper. Commissioner Currie stated the county never said taxes won't increase, and claimed they said they weren't taking their 3 percent increase. Currie blamed the Press for the headlines. County officials did not correct the misleading headlines. The Commissioners dismissed any obligation to inform taxpayers.

The Commissioners adopted the budget assuring all taxpayers a 2011 tax increase. When you vote this fall, consider how forthright your commissioners were in describing the spending changes in the budget. The spending increases and levy increases are shown in the table above. Does this demonstrate the ability to control spending, or raise taxes? If commissioners feel no duty to correct misleading headlines regarding the budget, are they competent to manage the $72 million dollar county budget? KOOTENAI COUNTY BUDGET STATS

Year Prop Tx % Chg Avg levy % Taxable AV % Chg Tax % of Budget2007 $26,700 0.18 14,535,837 42.1%

2008 $33,100 24.0% 0.21 16,841,126 15.86% 47.3%2009 $35,400 6.9% 0.23 15,993,511 -5.0% 47.2%

2010 $37,200 5.1% 0.25 14,781,630 -7.6% 50.7%2011 $38,100 2.4% 0.29 12,918,473 -12.6% 52.7%

[all #'s in 000's]Ed Morse is a Kootenai County resident.