District sets 2010 tax rates
Posted: August 12, 2010
Change in equalization rates result in New Scotland increase beyond initial projection
At its meeting on August 11, the Board of Education adopted 2010 tax rates for Bethlehem and New Scotland, the two towns in the district.
The new rates are: $19.64 per $1,000 of assessed property value for town of Bethlehem property owners and $20.27 per $1,000 of assessed value for New Scotland property owners.
Tax bills will be mailed by Labor Day, and are due by September 30 without penalty.
The tax rates differ between the two towns because, as is often the case in school districts that span multiple municipalities, properties in different communities are often assessed at varying levels in relation to full market value. The state assigns each town an "equalization rate" in an effort to fairly apportion the share of taxes paid by each town.
POWERPOINT PRESENTATION [PDF] EXPLAINING TAX RATE CACLUATIONS »
Using equalization rates recently set by the state, the tax rate increases under the final rates for 2010 are 2.83 percent in Bethlehem and 7.26 percent in New Scotland. The district projected increases of 3.14 percent and 3.17 percent, respectively, at the time of the budget vote; this changed as a result of the final equalization rates released by the state for the two towns on July 20 and 23 this year.
This year, the town of Bethlehem’s equalization rate changed more significantly — from 93 percent to 97 percent — than it had in recent years, while New Scotland’s remained the same at 94 percent. This means that Bethlehem's properties were deemed to be much closer to full market value, resulting in an upward shift in the share of total district taxes to be paid by property owners in New Scotland.
Because the piece of New Scotland that is part of BC makes up a relatively small part of the district’s tax base, a minor shift in the share of taxes it will pay can have such a significant impact on its taxpayers. Likewise, similar changes either way to the town of Bethlehem’s share don’t impact its tax rates much.
It should be noted that the total amount the district will collect in taxes next year — known as the tax levy — is not changing from the 3.08 percent increase in the budget voters approved in May. In crafting the 2010-11 budget, the Board held the spending increase to its lowest level in 34 years at 0.84 percent.
Because of the uncertainty that surrounds final assessments and equalization rates until well after the budget vote, the district emphasizes the tax levy (versus the tax rate) in budget meetings and informational materials leading up to the vote. The levy is the figure the district controls, and is the true indicator of how much the district is increasing taxes from year-to-year.
At the same time, estimated tax rates are often the first item residents ask about after the Board of Education adopts a budget for voter consideration. The district projects these rates based upon the prior year’s equalization rates — the best and only information it can use at that time to estimate changes to the tax rate.
Under the final tax rates set by the Board on Wednesday, the owner of a property assessed at $250,000 in Bethlehem will see a school tax increase under the final rates of about $135, not accounting for the state’s STAR tax relief program. For New Scotland, the owner of a property assessed at $250,000 would see a tax increase of $343 before any STAR exemptions.