Tax Hike Approved in MRH School District

Residential property owners in the may pay more on their tax bills this year than last if their assessed valuation remains the same, the district's chief financial officer said last week.

Last Wednesday, the MRH Board of Education approved a tax hike for residential property owners but reduced tax rates for commercial and personal property owners.

"Our debt service fund is very healthy … so we're using some of that fund this year to help our taxpayers," CFO Kay Lesley said. 

The changes mean someone owning a house valued at $100,000 house would pay approximately $52 more on their tax bill this year than last year, assuming their assessed home valuation remains the same, Lesley said.

This is the third year in a row that total assessed valuation has fallen in the MRH area, Lesley said. Total valuation in the district for residential, commercial and personal property fell by 4.2 percent this year, which equates to a $11.3 million decline—an "awful lot for a small area," Lesley said. Total valuation fell by 2.5 percent last year and 2.8 percent in 2009.

Lower valuations mean the district must increase the tax rate to continue
to receive the same amount of operating funds. While it will receive approximately $23,000 more in operating revenue this year than last, it will dip into its debt service fund in an effort to help taxpayers. That fund will be decreased by approximately $267,000, Lesley said.

The district uses its debt service fund to pay its principal and interest on its bonds.

"We did the rollback, we decreased our debt service rate in order to help our taxpayers," Lesley said. "And when we did that, we dip into our fund balance for debt service. But the board decided to do that in order to help our taxpayers due to the fact that our assessed valuation dropped so much."

The residential tax rate will be $5.261 per $100 of assessed valuation, a 5.48 percent increase over last year's rate. The commercial tax rate will be $5.37 per $100 of assessed valuation, a 3 percent decrease over last year's rate. And the personal property tax rate will be $5.9358 per $100 of assessed valuation, a 1 percent decrease over last year's rate.

The decrease in the commercial and personal property tax rate can be attributed to the state auditor's tax rate worksheet that determines the amount by which a district may increase its total levy, Lesley said.