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Sunday, May 1, 2016

State Budget woes will hit home on BV property tax

Thursday, July 11, 2002

Buena Vista County taxpayers have been reading about the state's budget crisis for at least two years.

Within a few weeks, they'll be reading about it in their own statements for local property taxes as the cash crunch quite literally hits home.

The taxes will hit the mail about the first week of August here, and they will be going up even without any increase in local valuations, according to Buena Vista County Treasurer Kathy Bach.

Legislative action a year ago reduced the credits which are subtracted from the amount of the taxes owed by the property owners, but the action came too late to show up in the statements mailed out in Buena Vista County in 2001. This year, the state appropriations bill specified that the cost of the cuts in credits will be passed on to the taxpayer, Bach warned.

Officials at the Buena Vista County Courthouse are still waiting for some of the details in program changes before they can determine how deep the state's actions are going to reach into taxpayers' pockets.

"They are going to see the difference. For example, they will be taking a 10 percent reduction in the homestead credit, and some of the other credits will be changing as well. Perhaps the biggest increase will be seen by the people taking the low income elderly credits. They will be hurt the most, and unfortunately they are probably the ones who can least afford this," Bach said.

It's an uneasy time for the staff at the BV treasurer's office. As soon as the tax statements go out, they know they will be getting some angry calls and visits at the window.

"We are the sounding voice for everyone. Whether we have anything to do with it (the tax increase), we hear about it. But that's okay because that's what we are here for," she said.

In the next two weeks county treasurers throughout the state will begin sending out the property tax statements for fiscal year 2003. In every county, those statements will reflect higher property taxes, due to the inability of the state to fully fund all property tax credits as they have in past years.

"We want people to be aware that this is coming," said Sharon Winchell, Cass County treasurer. "The state had to balance its budget, and one result is that all property tax bills are going to be higher."

In the past, the state has lowered property owners' tax liability through use of property tax credits - the homestead credit, the military credit, the family farm credit, the agricultural land credit and the low income/elderly credit. If a homeowner qualified for the credit, by being a veteran for instance, the state would cover the cost of a portion of a homeowner's property taxes.

But in 2002 the Legislature responded to the state's budget shortfalls by reducing funding for property tax credits by about $4 million. The result is that property taxpayers statewide have had all of their credits reduced. The homestead credit was cut by 10% and the low income/elderly credit is down by 20%.

"The state is still paying a portion of these property taxes on behalf of the individual taxpayer, just not as much as before," said Winchell.

The $250,000 cut in the low income/elderly credit will mean that elderly or disabled homeowners whose annual income is less than $8,900 may see a tax increase of up to $200.

"That is the one that really hurts," said Winchell. "The credit helps disabled people and people over 65 maintain their independence in their own homes. This is a really low cost when compared to other options. It is going to be really difficult for these folks to understand that they remain eligible for the credit, but now must pay an additional $200."

"It's not like this is a surprise," said Bill Peterson, executive director of the Iowa State Association of Counties. "The Legislature knew that reducing the funding for property tax credits would mean higher property taxes come July 1. But they were faced with unprecedented budget shortfalls and they just didn't have a lot of good options."

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