Lincolnites were so stunned by the increase in this year’s property value assessments that a concerned citizen created a free website to help neighbors protest their valuations.
Those increased values, however, often aren’t the same number as what the nearly identical house next door sold for a couple of months ago, And from that point on, confusion and misinformation abound.
Is it the county assessor’s fault? Not really. The state requires the assessor to assess at market value. The assessor looks at a property’s age, size, style of construction and replacement costs.
It doesn’t mean the assessor looks at neighborhoods precisely the same way as residents; the data might be on a broader or more general scale.
Nor does an increase in valuation immediately translate to a jump in property taxes that are split between Lincoln Public Schools, about 60% of the tax bill, the city of Lincoln, about 15%, as well as Lancaster County and other political subdivisions.
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What matters for a property tax increase is the formula — also known as levy rate — that each of the subdivisions uses to calculate the taxes. Working with staff, the elected officials in each subdivision create a budget, then set a levy that will bring in revenues to cover that spending. So, in the end, the elected officials determine property taxes.
Property values may go up, but that doesn’t mean the levies have to stay the same. If there is a windfall created by the increased values, officials can change the levy, adjusting it downward to keep year-over-year income the same or slightly higher.
Holding property tax revenues as low as feasible is important not only to low-income earners who are hit especially hard by increasing housing costs — for owners and renters — and a jump in taxes, but also to the forgotten middle — the workforce — which has increasingly been shut out of mid-priced housing options.
It also matters to businesses large and small, which will see costs increase if property taxes increase at the rate at which their valuations go up. And a giant jump could have a detrimental effect on the local economy.
It’s sobering to think that the authority to raise or lower property taxes resides with a few dozen elected officials, who we may not have spent an awful lot of time thinking about at the ballot box in the last local election.
But we have to trust they will responsibly exercise that authority in setting budgets and property tax levies.
So, will property taxes go up from the increased valuations? Maybe. But we hope not.
