Larry Riley Star Press 10/6/2013

In the last week, I’ve run into two people who have told me similar stories about discussions they’ve had with friends of theirs whom they know to be intelligent. They and their friends were talking about the upcoming referendum over raising Muncie Community Schools taxes. On Nov. 5, voters in Center Township will be eligible to cast a ballot either opposing or supporting increasing property taxes by 39.39 cents per $100 of assessed value of the property they own. Each person said their friends, after talking over the issue, made a statement similar to this: “Well, if the referendum passes, it won’t matter to me because our property tax already is at the property tax cap.” Way wrong response. We wouldn’t be having a referendum unless a pro-hike outcome was going to take local property taxes in Center Township the tax caps, and levy additional taxes. If you’re at the property tax cap, which 65.5 percent of homesteaded property owners in Center Township are (homesteaded property are homes in which the homeowner lives in the home), you’ll keep paying the maximum allowed by the caps and pay additional taxes WHAT ABOUT THE “AVERAGE” increase Muncie Community Schools officials keep talking about? School folks are fond of saying the “average” home in the school district is assessed at $75,000 and the owners will pay an additional $65 annually in taxes with rate hike approval. The mean assessed value of a homesteaded property in Center Township is actually $69,135, but the net assessed value on which property taxes are paid, thanks to a really generous homestead exemption, drops to $20,200. On this NAV, the additional taxes MCS wants would be $80 per year. More than one-third of all properties by parcel in the township are homesteaded. But what about the “average” non-homesteaded property, where people rent the homes they live in? Another 26 percent of property parcels in the township are in this category. The “average” property in this category is assessed at $57,102, and because those property owners get far fewer exemptions, the NAV average is $56,965. The annual increase on these property owners would be $224. If the owners don’t absorb any of the increase, average rent would increase by that much, about $20 a month. If owners are willing, say, to split the difference, rents would go up $112 per year. The highest property tax-paying category is commercial/industrial property, and the “average” assessment for these owners is $108,000. This is a little deceiving, though, because the range is really large: from a few hundred dollars up to the Muncie Mall’s $22 million value. How about a specific example? Lowe’s Home Center off Clara Lane on Muncie’s northwest side, is almost exactly 1 percent of the total commercial/industrial property assessment total. The company enjoyed a terrific second quarter of the year, with sales up 10.3 percent over the second quarter of 2012. If the referendum passes, Lowe’s will pay $33,721 in additional taxes. Say the home center has a 10 percent margin (could be optimistic). To pay the additional taxes will require $337,000 in additional sales. Given how well the year’s going, people might think, good, they can easily afford more taxes. Yet if the national chain wants to continue profit levels it currently runs, the layoffs of three part-time workers may be a better option than trying to sell one-third of a million more dollars worth of goods. Center Township has more than 8,000 parcels of commercial/industrial properties, but 93 percent of the assessed value is in 1,400 parcels, and all those are at the property tax cap maximum. WHO’S BEHIND THE “Vote Yes” and “Vote No” signs? That’s just what the Delaware County Election Board wants to know, though particularly about the former. The latter, unlike the former, has no single entity which will be advantaged by referendum defeat. The one entity with a big stake came up at last week’s Election Board meeting. Semi-retired local real estate agent and former Buick car dealership owner Brad Razor attended the meeting to inquire about the “Vote Yes” signs popping up around town, including on Muncie school properties. The rumor is that M&M bus company is doing it,” Razor told the board, “but I can’t imagine they’d be doing it without the blessing of the school system.” The MCS board has decided that if voters don’t approve increasing school taxes, they will eliminate bus transportation for students, and the system pays M&M to operate the bus service. Razor, a former Republican County Council member who has penned several letters to the editor opposing the referendum, said he could find no Political Action Committee filing of any group behind the effort, either. Anyone spending more than $100 to promote an election question would trigger a need to do so under existing law. Under a newer law that took effect last year, a vendor who contracts with a school corporation may not spend any money to promote the outcome. The Election Board agreed to send Muncie Community Schools officials, including the board president, a letter asking if they know who’s behind the signage, and given time constraints, members want an answer this week. Larry Riley teaches English at Ball State University. Email him at:lriley@bsu.edu