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TAX CUT `LOOPHOLE' IS OVERBLOWN

Alarming reports of a so-called "loophole" in the Legislature's recent property-tax cut have caused a bit more alarm than necessary.

Contrary to all the hype of recent published reports, school districts won't secretly eat away at the $90 million cut that was enacted to counter-balance the rising tide of property values. Nothing, in fact, has changed in the way school districts advertise tax increases.But that doesn't mean changes aren't in order.

School districts are allowed to levy an amount equal to 10 percent of their basic budgets for virtually anything other than teachers' salaries. They have to hold public hearings if they raise more money than the previous year, according to the "truth-in-taxation" law.

When lawmakers lowered taxes, they went beyond the "truth-in-taxation" hearing requirements and made all local governments hold a public vote if they intended to raise taxes. However, they passed an amendment exempting the 10-percent school levy.

A loophole? Yes, but hardly the kind that, as some have claimed, will erode up to two-thirds of the savings. In reality, the maximum impact it could have is $43 million, but that is only if all 40 school districts levy the maximum allowed. They still would have to hold public hearings and advertise the tax increase.

Still, in the interest of accountability and good government, lawmakers should make this levy subject to the same voting requirements applied to other funds.

The voting requirement is a good idea. Given the size of the tax cut, state residents could easily become confused. Governments could raise more money because of rising real-estate values and still apply rates that are lower than the previous year. A public hearing alone couldn't erase this confusion.

The requirement should apply to all levies. But, given the conservative way school districts have treated this levy in the past, this is hardly an issue worth a great deal of alarm.