Sean C. Morgan
Increasing real market values have led to more revenue than expected for the Sweet Home School District’s swimming pool.
In addition to increased funds for the local option levy, which pays for the swimming pool, increasing assessed values have decreased the tax rate for the district’s general obligation bonds for school construction.
Linn County sent tax bills for the 2015-16 fiscal year to property owners in October. The real market value of the geographical area encompassed by the Sweet Home School District increased from $1.14 billion in 2014-15 to $1.25 billion in 2015-16, an increase of 9.6 percent.
Business Manager Kevin Strong reported this information to the School Board during its regular meeting on Nov. 9.
Local Option Levy
District property owners pay a tax of 32 cents per $1,000 of assessed value to the district in a local option levy to pay for the operation of the swimming pool at Sweet Home High School.
The district is in its second year of the five-year levy.
Last year, the levy raised some $107,000. This year, the district will receive about $153,000.
That’s about $45,000 more than the district budgeted this year, Strong said.
“The ballot for the local option levy was specifically to support the swim pool, he said. “Therefore, our plan is to set aside the extra local option levy revenue in the district’s Long-Term Maintenance Fund for swim pool maintenance, most likely a necessary upcoming roof replacement project.”
Most of the increased revenue is the result of rising real market values, which decreases what public officials call “property tax compression.”
Tax rates are imposed based on assessed value – or real market value, if it is lower. For education funding, the property taxes are limited to $5 per $1,000 of real market value. The amount imposed based on assessed value is compared to real market value and reduced to the $5 limit.
When it comes to collecting taxes, local option levies are reduced prior to permanent tax rates.
As real market values increase, the total tax imposed will grow larger when a property is under compression. Real market values are calculated by the county, based on comparable sales data.
Assessed values may climb by 3 percent per year except when property is reassessed based on new construction or improvements.
The district also benefited from some new construction in the past year, Strong said, noting that Bi-Mart is paying $575 in local option levy revenue.
With the levy raising additional revenue at this point, the board may need to decide what to do with it in the next fiscal year, 2016-17.
The board could levy less than authorized by voters, Strong said. “Do you keep the tax rate at this level so we have some of the funds available to replace the roof (for example), or do you look at lowering the local option levy for next year?”
That’s not just a Sweet Home School District question, Strong said. That’s something other taxing districts, such as the county, will have to consider.
Bond Levy
The tax rate for the district’s bond levy, which was used to rebuild portions of Sweet Home High School and a new wing of classrooms at Hawthorne School in 2001, decreased this year.
With the bond levy, the district imposes a tax to make debt payments, a specific amount of money, which means it is spread across the overall assessed value. When assessed value rises, the amount charged per $1,000 is lower, although the total tax imposed does not change.
The rate for the bond levy in 2015-16 is $1.6371 per $1,000 of assessed valuation, down from $1.6615 in 2014-15. The assessed value of the district increased from $848.6 million to $885.7 million in 2015-16, an increase of 4.4 percent.
In comparison, the rate was $1.9115 per $1,000 of assessed valuation following the passage of the bond.
The most significant decrease in the bond levy rate was in 2005-06, when the district refinanced the bond debt, Strong said.