Almost as bad as local politicians who mislead on property taxes each year is how muddled, how unclear the reporting is on proposed taxes by local media. Most stories never mention the Effective Tax Rate and yet it is that number, that percentage, to which you must compare any newly proposed tax rate to know if such proposal is a tax increase, decrease, or keeping it the same.
Instead you get comments about how the tax rate compares to the tax rate of the previous year which is meaningless and fundamentally ignorant reporting.
Often local officials say they didn’t raise the tax rate, or the percentage (think of “tax rate” as “percentage”), or that they raised it only slightly. They compare the previous year’s percentage figure to the coming year’s proposed percentage, or tax rate, figure they’ve set.
The appraised values change each year and thus leaving the tax rate, the percentage, the same isn’t keeping taxes the same if property values have risen or fallen.
The local tax rate being set is only meaningful when applied to the total appraised values of property in the taxing district. It has no meaning when applied to what the tax rate was before in a previous year. The appraised values change each year and thus leaving the tax rate, the percentage, the same isn’t keeping taxes the same if property values have risen or fallen.
Don’t let them fool you by talking “tax rate,” you need do know if the “tax rate” is above or below the Effective Tax Rate, the No New Revenue Rate, to know if it’s a tax increase or not.
The “tax rate” doesn’t tell you if locals are raising your property taxes
Instead you get comments about how the tax rate compares to the tax rate of the previous year which is meaningless and fundamentally ignorant reporting.
Often local officials say they didn’t raise the tax rate, or the percentage (think of “tax rate” as “percentage”), or that they raised it only slightly. They compare the previous year’s percentage figure to the coming year’s proposed percentage, or tax rate, figure they’ve set.
The appraised values change each year and thus leaving the tax rate, the percentage, the same isn’t keeping taxes the same if property values have risen or fallen.
The local tax rate being set is only meaningful when applied to the total appraised values of property in the taxing district. It has no meaning when applied to what the tax rate was before in a previous year. The appraised values change each year and thus leaving the tax rate, the percentage, the same isn’t keeping taxes the same if property values have risen or fallen.
Don’t let them fool you by talking “tax rate,” you need do know if the “tax rate” is above or below the Effective Tax Rate, the No New Revenue Rate, to know if it’s a tax increase or not.
See my commentaries that well explain how property taxes work here.