With property values in Marshall County increasing by nearly $278 million for the 2012 tax year, residents could see a 3 percent average increase in personal property taxes.
However, in an effort to offset that increase, Marshall County Assessor Chris Kessler said Wednesday he would formally recommend that Marshall County Commission reduce its levy rates.
Nearly 50 people filled a Marshall County Courtroom on Tuesday night to hear Kessler explain why the increases have happened and what the potential profits could mean to the county and board of education. He said the the majority of the $278 million increase stemmed from Class III properties, which include vehicles, rental properties and equipment outside municipalities. Gas production companies, he said, are included in that class.
Photo by J.W. Johnson Jr.
Marshall County Assessor Chris Kessler speaks to a crowd of nearly 50 people Wednesday during a meeting on taxation at the Marshall County Courthouse.
The 3 percent increase is an average that not every resident will see, Kessler said. He added that the tax hike puts the county in compliance with state guidelines, which mandate assessments must be at a level of 90 percent of valid residential sale prices.
"If we didn't increase this amount every once in a while, we would eventually be behind and have to hit you with a potential 15 to 20 percent increase," he said. "We're talking a $12 increase to an $80 increase if we were to wait."
To combat the impact of that increase on residents, and because the county is seeing an influx of money from other sources, Kessler said he would recommend the Marshall County Commission reduce its levy rate. In 2010 and 2011, the county levy rate was 26 cents per $100 of assessed value. Although he did not specify how much he would recommend it be reduced, he did provide figures that laid out the difference in taxes if a 3 percent reduction were implemented.
According to Kessler's documentation, an assessed property value of $50,000 in 2011 would require the owner to pay $597.30 in taxes, with $130 going to the county. The state would receive $2.50 under its 0.5 cents per $100 of assessed value levy rate, and $418.90 would go to the school board, which has a rate of 83.78 cents per $100 rate. An additional $45.90 would go toward the school bond, which voters passed to build new schools in the district and carries a levy rate of 9.18 cents per $100.
If all levy rates were to remain the same with the increase in assessed value, the same property would now be worth $51,500, costing a total of $615.22 in taxes with $133.90 going to the county. However, if the county levy rate were to be reduced 3 percent, the overall cost would be reduced to $598.28, with $129.88 going to the county.
Kessler said a decision on the levy rate will be made in the coming weeks, and once the board of review and equalization period ends, the assessor's office is no longer part of the process. The final meeting of the commission as the board of review and equalization is set for 6 p.m. Friday.
Additionally, Kessler said royalty payments are also starting to flow from gas drilling companies, leading to those who signed leases not only receiving their money, but also being taxed on that money. He said that with more than 3,500 new accounts from gas and oil leases coming through his office over the past few years, keeping track has been difficult.
''When we get the initial lease, a lot of times it won't set a royalty rate or tell the money per acre,'' he said, adding that in those situations, an assessment of $120 is written in.
However, once a well begins producing and a lease holder begins receiving royalties from a company, the royalty rates are reported to the state tax office. Once that happens, the state assesses the minerals and reports its findings to Kessler's office. Necessary changes are made to the assessed value and contribute to tax increases, he said.
The 90-minute meeting was organized by the Marshall County Citizens for a Better Government group.