We’re in the midst of a pandemic and sinking into a pandemic-driven recession, possibly a depression. Unemployment has soared, oil prices have plunged, economic activity has been brought to its knees. Yet the tax man still comes calling. Property tax assessments are out. And they’re not helpful. Teton County’s total valuation once again increased, although a mere 4% this year versus double-digit increases the past few years. That means your property tax likely went up.
“Why don’t you reduce our property taxes?” many ask.
We could. But there ain’t no such thing as a free lunch.
Our property is taxed 57.554 mills for every $1,000 in assessed value. That’s the equivalent of $57.55 per every $1,000. Assessed value is 9.5% of an approximate market value obtained using computer-assisted mass appraisal. A $1 million dollar property would be assessed 0.057554 x 0.095 x $1,000,000 = $5,467.63 of property tax.
Of the 57.554 mills, state and local school funds receive 43.6 mills, or over 75% of the total. The county receives 5.936 mills to our general fund, 1.561 mills to the library fund, 0.5 mills to the Fire Protection Fund and 0.407 mills to the Fair Fund, totaling 8.404 mills or just under 15% of your total assessment.
To reduce our property tax we could cancel the Teton County Fair, close the library, slash the fire department’s budget and/or reduce our general fund portion by up to 5.936 mills. Cancel the fair? Sadly, that might happen for health reasons. Close the library? Bad idea. Cut 0.5 mills (around $1 million) from the Fire Protection Fund? Even worse idea. No fair plus stripping 5.936 mills of revenue from our general fund would reduce property taxes by 6.343 mills, or 11%.
Property tax on a working-class home in a neighborhood like Cottonwood Park, where houses sell in the $750,000 to $1 million range, is around $5,000. An 11% reduction puts about $551 — $46 a month — back into the owner’s pocket. Not peanuts, but about the cost of a relatively inexpensive restaurant meal for two. Per month. That’s something. But it doesn’t heal the pain that many are feeling. We need our jobs back. Period.
In the fiscal year 2019 county budget, property tax revenue amounted to $9,586,492 out of $33,553,671 in total tax revenue. Sales tax revenue amounted to $19,150,562. License, permits and miscellaneous fees contributed another $10.5 million. We’re predicting a 20% to 40% drop in sales tax revenue for the upcoming fiscal year, a decrease of anywhere from $3.8 million to $7.6 million. Fee income will almost certainly decrease as well. Using fiscal year 2019, reducing the mill levy by the maximum possible amount under our control, or 6.343 mills, would strip $9.5 million in revenue from the budget. Adding that to a likely $5 million decrease in sales tax revenue amounts to a 35% reduction in a $42 million budget.
Local government is relatively efficient. Revenue gets directly translated into public safety, public health and promotion of general welfare. Much goes toward job-creating capital construction, repairs and maintenance. Local government is lean. It cannot run deficits. The budget is transparent. You can read through it in a couple of evenings after putting the kids to bed and get the gist of where we get our revenue and what we are spending it on. And our budget process is public: no back-room, side-door deals.
The Board of County Commissioners has already asked departments and elected offices to cut their budgets by 20%. Salary and hiring freezes are in place, with some vacancies going unfilled. A 35% reduction would mean deeper cuts and broader layoffs, though certainly not in the public health department, which needs more staff than ever to track and trace coronavirus cases.
We would freeze capital construction or repairs (think potholes) on roads and pathways — projects that create much needed jobs. We would postpone facility repairs and reduce maintenance of public buildings and Parks and Rec infrastructure, again eliminating jobs. Pushing capital and maintenance spending into the future, when it will likely be more expensive, will force taxes to go back up. Finally, we would zero out funding for the construction of affordable housing, eliminating yet more jobs and forgoing opportunities to build the kind of housing we need the most.
Aside from eliminating construction, maintenance and clerical jobs, a 35% budget cut could mean longer wait times at clerk and treasurer windows, longer review times for building permits and slower response times to building inspections. Some public restrooms will remain closed, such as those at the Stilson parking facility. Rec Center hours would be reduced. And there would be no fair.
So yes, we could save a property owner at most $46 a month. But that meal we’re saving you might mean fewer jobs at a time we need them the most. As we contemplate ways to address the devastation wrought on our community by the pandemic, it’s important to understand that tradeoff.