City Council members began taking steps to potentially increase Olney's tax rate by 8 percent over the effective rate at their regular meeting on Monday, Aug. 26. If approved, the increase, coupled with higher property tax rates in the city, will help tax revenue overall.
In reality, the proposed rollback tax rate of .736805 per $100 valuation will be lower than last year's rate of .774084 per $100 valuation; however, City Administrator Danny Parker explained that the new proposed rate is 8 percent higher than the effective rate of .682227.
According to Parker, the effective rate, which is governed by state law, is the rate at which a municipality will receive the same amount of money in property taxes as the previous year, based on current property values.
“It's an increase because property values have gone up,” he said. “The total taxable value of property in Olney is higher, and the effective rate is set so you can collect the same amount of taxes as the year before.”
By increasing the tax rate for the next fiscal year to .736805 per $100 valuation, the city will be able to collect more money from property taxes.
Council member Jake Bailey explained that the rollback rate is the most a city can raise its taxes without the possibility of citizens requesting a recall election, and Parker reiterated that the rollback, in this situation, is actually cheaper than last year's rate and will still bring an increase in tax revenue for Olney.
“So it's good for everyone?” Lauren Sullivan asked.
“It depends on the taxpayer,” Councilman Phil Jeske II said.
Jeske explained that property owners who saw little or no increase in their values will not see much of a change, but those who had higher increases will likely pay more.
“It's going to be pretty close based on average value,” Jeske explained. “If your property went up 20 percent in value, it will go up more than a home that went up 1 percent.”
Marshall Leemann noted that the city can definitely use the increase in revenue, and later made the motion to put a proposal to adopt a tax rate with an 8 percent increase on the Sept. 23 meeting agenda. Public hearings will be held on the rate in coming weeks. The motion passed unanimously.
Another item on the council's agenda was a discussion on cemetery upkeep, and what the plan is to maintain the properties. Parker said the situation with the currently hired caretaker, James Rockenbaugh, has not improved, and that he had received notice that his contract will be terminated on Sept. 4 if there is no change. Members brought up a proposal to add $1 to each water bill to help with expenses of paying a caretaker.