Monday, May 6, 2013

State Balances Budget      published 4/6/13

By keeping more local tax money in Columbus.

In the current 2012-2013 budget the state cut the “local government fund “, direct funding to municipalities and the compensation for the elimination of the personal property tax on business.
The amounts of the county city and schools reductions in the current state budget from the 2010-2011 totals:
County Operations –$2,900,000
Public Library Fund -$640,000
Schools -$5,000,000
Wilmington City -$708,000
The local service levies were also cut:
County health -$44,000
Child Services -$126,000
Mental Health -$322,000
Senior Service $120,000

The prospects for the next budget cycle are not much better for local governments.
The state will experience a loss of revenue if the income tax rate is reduced, the oil and gas drilling tax is not increased and the sales tax coverage is not expanded.

In order to save millions and again balance the state budget the legislature is contemplating, among other things, the elimination of the 12.5% residential property tax roll back rebate to local governments. The state has for many years compensated local governments by making up the roll back loss. Similar action was taken several years ago when the roll back was eliminated for commercial property.
The effect of this legislation would be a tax increase on local home owners who may also be facing further cuts in services and/or tax levy requests by schools and local governments.

If  the12.5% rollback is eliminated, a resident owner of a $100,000 home would have a tax increase of $202 per year. An equivalent of a six mill property tax increase. No new revenue would be generated for local entities and rhe state would save the $202.

Paul Hunter

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