Property owners in Moscow could pay 25 percent more in taxes next year, city officials say.
In a budget workshop Monday at the Moscow City Hall council chambers led by Moscow City Supervisor Gary Riedner, city council members and city administrators discussed a budget proposal that included the hike.
The increase would raise taxes on property owners from $4.49 per $1,000 of assessed property value to $5.63, an increase of about 25 percent. For homeowners in Moscow, who receive a state tax exemption for 50 percent of their property’s value up to $100,000, this means they would pay about $560 annually on a home valued at $200,000 – up from about $450 last year.
The largest chunk of the increase supports the retirement of a $10 million bond, approved by voters in May, to fund the construction of new police station among other items. That bond will be paid over the course of 10 years at $1.1 million annually, and is representative of a 19-percent increase in property tax.
The remaining increase is comprised of two roughly $200,000 increases in the local property tax rate, or a rise worth about 3.5 percent of the current rate for each increase. One is a flat increase to the base property tax rate in Moscow; the other functions exactly the same as the first – increasing city property taxes by about 3.5 percent annually – but comes from a taxing authority that was deferred in previous years and called a “foregone” amount.
Riedner said forgone money is better described as tax authority accumulated when a municipality declines to collect the full tax increase allowed by the state legislature in a given year.
“They call it foregone or banked – it’s not real money because it’s not levied, it is budgetary authority, that’s all it is,” Riedner said.
He said the amount declined accumulates as a real dollar rate over the years and a municipality has the option to tax for and collect the full rate or a portion of the rate in ensuing years as a kind of indefinite levy.
Moscow rarely accepts annual tax increases and so has the “foregone” authority to raise taxes by nearly $325,000 a year. It has elected to recapture $200,000 of that. Riedner said this will provide a stable fund to support raises planned for Moscow police officers.
“The property tax payments made to the city, which the property owners are going to pay, is going to increase by $200,000 and next year, it will be that same $200,000,” Riedner said. “I’ve got to depend on that money to pay the cops every year because one time funding like a grant – that’s going to run out.”
Riedner said administrators would make revisions and corrections based on suggestions from Monday’s meeting and release the proposal for public view and comment. A public hearing on the budget is scheduled for Aug. 5.
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