Sean C. Morgan
Property tax bills are out, and overall they’re higher this year than last as assessed and real market values grew across the county and Sweet Home.
Property in the Sweet Home city limits faces the highest combined tax rate in the county, $23.04 per $1,000 of assessed property value. Brownsville is second with a combined tax rate of $22.16 per $1,000 of assessed property value. Lebanon is at $21.78, and Albany has a combined rate of $19.56.
However, property tax rates are limited to $10 per $1,000 of real market value for general government and $5 per $1,000 of real market value for education. Real market value is calculated separately from assessed value, which was limited and capped by voters at 3-percent growth per year in 1998. Property taxes used to pay general obligation bonds are outside the limits.
For a property in Sweet Home worth $100,000 in real market value, property taxes are limited to $1,500 plus taxes for general obligation bonds. Sweet Home School District, Linn-Benton Community College and the Sweet Home Fire and Ambulance District have general obligation bond levies, which causes tax bills in Sweet Home to exceed that limit.
If that home had an assessed value of $90,000, a common situation in the city, the property tax would be $2,073.90. The difference is not collected, and public officials refer to it as “compression.”
This year, Sweet Home-area taxing agencies experienced decompression, realizing growth in revenues due to growth in both assessed and real market values. Assessed values in the city limits increased by 4.6 percent overall, $17.7 million, to $401.5 million. Overall assessed values can grow faster than 3 percent based on new construction.
Real market values increased by $35.5 million, 8 percent, to $476 million. Linn County was worth $8.7 billion in assessed value and $11.4 billion in real market value.
With increasing values, the city experienced “decompression,” calculating compression loss at 32 percent this year, down from 35 percent in fiscal 2013-14 and 33 percent in 2012-13.
Bottom line, the city will receive unexpected revenue this year, for fiscal year 2014-15, which began July 31 and ends on June 30.
The city’s General Fund will receive $26,000 more than city officials budgeted for in property tax revenue, a total of $514,000.
The Police Department, through its local option levy, will receive $1.49 million in taxes, about $146,000 more than it budgeted.
The Sweet Home Public Library will receive $191,000, some $19,000 more than it budgeted.
“This year, we did not budget for any increase in property values,” said city Finance Director Pat Gray. “That was anticipating Edgewater coming off the rolls.”
Linn County purchased and now operates the Edgewater RV park at the east end of the city.
Bi-Mart, finished in the spring, won’t show up on the tax rolls until next year, Gray said.
Ultimately, compression was less than expected, Gray said. “We’re good to go this year, holding steady. We’re looking for new ways to bring money in.”
The parks program is planning a Sweetheart Run for February, for example, to help raise parks funds. The Youth Advisory Council is working on a “dirty dog dash.”
It’ll help as the Police Department faces an ongoing shortfall between its levy and service level, Gray said, but it won’t cover the expected shortfall.
The city transferred money from the General Fund this year, 2014-15, to bolster the Police Department’s ending fund balance, carryover used as a beginning fund balance for the following year and to cover operational costs from July to November when property tax revenue begins arriving.
The General Fund will need to transfer again next year to cover the Police Department budget, Gray said, and that’s why city staff have tightened General Fund spending and started considering fund-raising events to help bolster some city functions.
The city has chosen not to fill some positions, Gray said. One Municipal Court position is halftime, and the city has yet to replace its retired community development director, a position that included parks supervision, land use planning and code enforcement.
With Budget Committee and City Council approval, barring a catastrophe of some kind this year, the city will have the resources to cover the Police Department budget next year, 2015-16, the last year of the police and library levies.
The budget includes $918,000 in its ending fund balance, carryover for 2015-16, and its actual ending fund balance for 2013-14 will be $1.8 million based on city money-saving measures. It had been budgeted at $812,000.
“We’re operating the same as we’ve operated the last several years,” said Police Chief Jeff Lynn. Borrowing a term from the previous chief, Bob Burford, the department is operating in “fiscal crisis” mode, he said.
The department spends conservatively, Lynn said, and its staffing remains down two or three officers from 2006 levels.
But he doesn’t anticipate any cuts in the department at this point.