Monroe County: land of low (school) taxes

Here’s something to keep in mind with the approach of a November tax referendum to support the Monroe County Community School Corp.: Even if we pass the referendum, the MCCSC property-tax rate will still be well below the state average for schools.

Rates for 2010 for most local taxing units in Indiana are available in a report from the Department of Local Government Finance. It says that the average property-tax rate for Indiana school districts is $1.02 per $100 assessed property value. The MCCSC rate is 57 cents per $100 assessed value.

The referendum would give the school board the authority to increase the rate by as much as 14 cents. If nothing else changed, that would make the MCCSC property-tax rate 71 cents per $100 assessed value – still 30 percent lower than the state average.

It’s important to remember, of course, that school taxes aren’t the only property taxes we pay. There are additional property-tax rates for city, county and township government, public libraries, solid waste districts, etc.

It’s also noteworthy that, since the 2008 Indiana “property tax reform” legislation took effect, our property taxes don’t support the school general fund, which pays for salaries, benefits and most operating costs. That money comes from the state (which raises the revenue primarily through income and sales taxes). For the most part, school property taxes pay for construction and maintenance of buildings and equipment and for transportation.

In the MCCSC, the situation will change if we pass the referendum. The 14-cent tax increase would produce $7.5 million a year to augment what the MCCSC gets from the state for its general fund.

Take a careful look at the DLGF tax-rate report and you’ll see that property-tax rates for schools are all over the board. And the variations make a difference.

Say you own and live in a house in the MCCSC district that is assessed for tax purposes at $200,000. Assuming you get only the standard homeowner’s deductions and no extra tax credits, the MCCSC share of your tax bill for this year is $574.

But if you live in Noblesville, where the current school tax rate is $1.12, and your house is worth the same $200,000, then your school tax bill is $1,128 – almost double what it is in the MCCSC.

Property assessments are supposed to reflect market values, so a house that’s worth $200,000 in Bloomington should be assessed the same as a house that’s worth $200,000 in Noblesville.

The property-tax rate for Monroe County’s Richland-Bean Blossom school district is 70 cents per $100 assessed value, in the same ballpark as the MCCSC.

It’s interesting to look at the property-tax rates of school districts that put general-fund referenda on the ballot in the May 2010 election. A data base from the IU Center on Evaluation and Education Policy lists the districts.

With one exception (Noblesville), the districts where referenda passed had lower-than-average tax rates. They were: Carmel-Clay, 65 cents; West Lafayette, 89 cents; Washington Township (Indianapolis), 51 cents; and Speedway, 37 cents.

Districts where referenda failed had higher-than-average rates: Western Boone, $1.10; Clarksville, $1.30; and Eastern Hancock, $1.03.

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