Local Taxing districts like schools, fire departments, Libraries, Park districts, and cities should not raise their Levy if they are truly concerned with the tax payer. Members of these Boards are elected, and should represent the taxpayer. Yes, there are times it is necessary to raise the levy, but not every year, and not to the maximum allowed. The myth of capturing the new growth by raising the Levy needs to be understood.
A Community will bring in new commercial development in an effort to lower the tax burden on its residents. This effort is defeated when taxing bodies raise their levy’s (taxes) to capture the new growth. It is also defeated when spending is increased.
Total Amount taxed (needed) by each tax district (levy) = Total amount of dollars collected by those in each district
The tax rate = the percent each property owner must pay to get the money needed by each District (Based on State formulas used by the assessor called assessed value)
Not increasing the levy, is saying no to increasing the need (spending). Any new dollars (New Growth) added to the amount paid by those in each district will also decrease taxes (dollars paid by those in the district) as long as the Levy is not increased.
Board members are told by not capturing new growth, the tax money they are can get is lost. They in turn vote to raise the Levy as to not lose this revenue. The problem is tax creep, the consequence of “Raise my tax itis” which keep taxes going up each year. New Growth or additional tax dollars are not lost forever like our elected board members think. Rather the taxes are collected and the additional money goes to the district in 1 to 1 ½ years because the system is 1 year behind. By living within their means, not increasing the Levy, the Elected Board Members postpone getting this new money for a short time. Boards would prefer to give the tax district a raise by increasing the amount of tax money coming in immediately.
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