Monroe County Property Tax Levies – Where Does Your Property Tax Go?

In a post two days ago (2012 Budget Orders for Monroe County Released – Property Tax Rates for Monroe County), I wrote about the aggregate property tax rates for each taxing district in Monroe County for 2012. These rates include funding for all of the units of government that serve each district — county government, municipal government, township government, schools, libraries, solid waste management districts, etc.

In this post, though, I want to call attention in particular to the tax levies and rates associated with funding Monroe County Government in particular. All property owners in Monroe County (except for those that are tax-exempt) pay these rates.

The following table shows the budget, tax levy, and tax rate for each of the 5 funds under the so-called “frozen levy”. The frozen levy refers to the fact that, under some property tax restructuring back in 1973, all units of local government had their tax levies frozen at their 1973 levels, and were only allowed to increase by a small “cost of living increase” amount per year based on overall income growth statewide. There are exceptions to this — growing communities, for example, are able to apply for what are called “excess levies” to accommodate this growth. Monroe County received an excess levy to create two new courts back in 2007.

Fund Budget Levy Tax Rate
General Fund  $29,373,803  $14,516,322  $0.2318
2015 Reassessment  $-  $488,470  $0.0078
Cumulative Bridge  $422,318  $1,333,898  $0.0213
Health  $966,365  $513,520  $0.0082
Aviation/Airport  $794,135  $413,321  $0.0066

By and large, thought, the total frozen levy (the total of the “Levy” column in the above table) remains constant other than that the cost of living adjustment (in 2012, that allowed increase was 2.9%). Also note that the frozen levy is different from the so-called “property tax caps” that were enshrined in the Indiana Constitution in 2010.

The funds under the frozen levy are:

  • General fund — funds most aspects of county government operations, including the courts, sheriff, jail, prosecutor and public defenders’ offices, auditor, treasurer, etc.  As you can see, the property tax levy covers about half of the general fund’s budget; the rest comes from income taxes and other miscellaneous revenues (fees,interest income, etc.)
  • 2015 Reassessment — funds the upcoming property reassessment in 2015. Since the reassessment isn’t until 2015, the budget for this fund is 0 — meaning that the point of this levy is to accumulate enough money in the fund to perform the reassessment when it is required. The state mandates that the County Council levy $488,470 in 2012 for this fund.This method of funding reassessments will change, though, based on some legislation just passed in 2012, which will allow so-called cyclic reassessments (in which part of the property in the county is reassessed each year, rather than having one big reassessment of everything every 5 years).
  • Cumulative Bridge Fund — funds maintenance on all of the bridges in the county, including those within city or town limits. The budget in this fund is significantly less than the levy — the reason is that Cumulative Bridge projects are funded as projects, rather than in the annual budgeting process.
  • Health — funds the Monroe County Health Department. Again property taxes only fund around half of the budget of this department; the rest is funded through fees (septic permits, birth certificates, etc.).
  • Aviation/Airport – funds the Monroe County Airport (BMG). Similarly, property taxes fund about half of the budget of this department, with the rest coming from landing fees, surcharges on fuel, etc.

The County Council essentially has the ability to decide how to allocate the tax levies and rates within these funds in the frozen levy (as long as they add up to no more than the allowed amount). There are some exceptions to this — as I mentioned earlier, the reassessment levy amount is set by the state, and the Cumulative Bridge Fund is what is known as a “rate-controlled fund”, so the Council sets a rate for it, and then whatever that rate generates comes out of the remaining frozen levy amount. I will make another post about this Cumulative Bridge Fund issue in the future.

There are also several tax levies for Monroe County Government that are outside of the frozen levy.

Fund Budget Levy Tax Rate
Debt Payment  $924,000  $1,653,283  $0.0264
County Fair  $-  $81,412  $0.0013
Cumulative Capital Development  $2,683,123  $1,978,929  $0.0316

I’ll briefly describe each of these funds:

  • Debt Payment — this is the levy to service the mortgage for the Showers building purchased by the County in 2011. Note that this is the only debt that Monroe County Government has. Monroe County has always been very frugal about taking on debt. The budget for the debt payment is less than the levy because only one of the bi-annual bond payments are actually due in 2012 — the second 2012 payment is actually due in January of 2013.
  • County Fair — this is a required levy, and the county does not actually have any control over this at all. The County Fair budget is controlled by the Fair Board, not by the County Council.
  • Cumulative Capital Development (CCD)– this levy is to support large capital purchases, such as equipment, infrastructure, building, furniture, and police vehicles. The types of things that the CCD fund can be spent on are strictly enumerated in the statute. In particular, these funds cannot be spent on personnel or salaries — with one exception: the statute allows information technology (IT)/computer-support positions to be paid out of this fund.

All of these three funds are outside of the frozen levy described above — but all of them are still inside the property tax caps in the constitution.

As an aside, there is a common belief that additional development means additional property taxes for local government. However, because of the frozen levy, this simply is not true. Of all of the tax levies described above, the Cumulative Capital Development fund is the only levy that actually increases as assessed value increases. So additional development does provide a small amount of additional revenue for county government to provide infrastructure and buy “stuff” — but does not provide one additional dollar of revenue to support that development — to provide police and criminal justice services, for example.

So broadly that’s where your property tax dollars go in supporting Monroe County Government.

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