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Property values rise, but county tax rate likely to drop
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FarkTax rates for property owners in Pennington County are likely to drop again for next year, according to Auditor Julie Pearson.
The rate, called a levy, is dropped to offset higher total property valuations.
The county tax levy this year was $4.57 per $1,000 of assessed valuation. So an owner of a $100,000 property would pay $457 in county taxes this year.
The state allows counties to raise total taxes on existing property by the Consumer Price Index, up to 3 percent. The state set the CPI this year at 2.9 percent.
But the state doesn't allow the counties to benefit more than the 2.9 percent gain from increased valuation of existing property, so when total valuations rise, the tax rates, called levies, fall.
So property owners whose assessed valuations rose less than 2.9 percent this year likely will see a decrease in their county property taxes next year, Pearson said.
However, if a property owner's assessed valuation rose more than 2.9 percent, his or her taxes likely will rise, she said.
Final word in individual property taxes payable next year, however, is a long way off because the county is just getting started on determining its 2009 budget, which must be finalized by Sept. 30.
Pearson said the county will be able to raise another roughly $1.6 million in property taxes this year, from the 2.9 percent increase in taxes on existing property and from taxes on $193.5 million in new construction.
The additional tax revenue will bring the total county property tax revenue for next year to $31.1 million, up from $29.4 million for this year, Pearson said.
However, other revenues, including county fees, federal grants and matching funds, will not be determined until after the county sets budgets for the various county departments.
Pearson explained that many of the departments, particularly the sheriff's office, depend on matching money from various sources. So a cut of, say, $1,000 in county money for a particular program could also mean the loss of another $1,000 in matching money.
Commissioners voted Tuesday to tentatively set county employee raises at 2 percent, with the option of raising them by as much as 2.9 percent after the budget is finished.
The county commission voted to hold budget hearings on May 13 and May 27.
The budget for this year is $64.6 million.
Pearson emphasized that the budget process is just beginning. But she said she is fairly certain that the county and city levies will fall every year under the current system.
Still, the state sets the tax levy used to fund schools and school taxes account for 60 percent to 70 percent of the total tax bill. So the total levy an individual property owner pays may not fall, even if the county levy falls, she said.
The county must finish its provisional budget by July 31.
Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com
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