It’s rollback time in Boone County.
A booming real estate market and reassessed property values have caused many local taxing jurisdictions to cut their property tax levies. Boone County Assessor Tom Schauwecker said preliminary reassessments of all properties in the county showed an increase in value of about $227 million as of June 16. Reassessment of county real estate and new construction has raised values by about 19 percent to a total of more than $1.5 billion.
“Increased property value is like a double-edged sword,” Schauwecker said. “When it comes time to sell property, it’s wonderful, but it can also be painful when Dec. 31 comes around and you have to pay your property taxes.”
Higher property values have forced taxing entities such as school, library and fire districts to lower their levies. The rollback is intended to prevent such entities from reaping windfalls as a result of the spike in real estate prices. Property tax rates must be set within the limits of a state law that sets a ceiling for the total amount that can collected.
Boone County was among the many taxing entities that reduced its levies. The county reduced its common road and bridge tax from 5 cents to 4.75 cents per $100 of assessed valuation. County Clerk Wendy Noren said county officials were not legally required to roll back county levies but did so because it was the right thing to do.
“We wanted to be able to provide some tax relief and to demonstrate to the state legislature that we don’t have to resort to Draconian tax-rate rollbacks,” Noren said.
Although the county’s reduction in tax rates was minimal, sometimes every little bit helps.
“For most people’s tax bills it won’t add up to but a few pennies, but those pennies add up,” Southern District Commissioner Karen Miller said.
Boone County residents should not expect rollbacks to be dollar for dollar. Taxing entities are allowed to reap some new revenue based on inflation and new construction. Schauwecker said taxing entities this year will benefit from a 3.5 percent inflationary increase and $81.3 million in new construction.
Boone County’s hot real estate market is in line with a national trend of rising home prices.
According to the National Association of Realtors, the national median existing-home price for all housing types was $220,000 in August, up 15.8 percent from August 2004. This is the strongest annual growth rate since the 17.2 percent rise in July 1979.
“This is the biggest change we’ve seen in 25 years,” Schauwecker said. “It doesn’t look like our market is cooling. Our bubble has not burst, yet.”