Yesterday's
State Journal reported that overall property values over the past 12 months have declined, on average, by 0.8%. While that's encouraging news given the 4-5% decline seen last year, it still suggests problems for the 2011-12 SPASD budget.
One of the key budget parameters was to keep the mill rate increase below (gulp) 4.5%. While the McCourt's of the world will wave their hands and say that property values don't affect the budget, that's a little smoke and mirrorsy, and borders on being disingenuous. It's true that property values do not affect the budget, but property values ABSOLUTELY DO affect the mill rate. In fact, assuming no change in the tax levy, each 1% decrease in property values translates to a 1% INCREASE to the mill rate.
Since the board budget assumptions includes a property value (aka Equalized Value) increase of 0%, if Madison is taste of things to come, then we may find a similar 1% decrease in value. That means the target mill rate just climbed to 5.5%.
Yeah,yeah... we know ...the Rubenesque lady ain't singin' yet. But....it's not like there's been a huge amount of growth in the city here. Certainly nothing big enough to impact a $4B district-wide valuation. And area homes aren't exactly selling at prices that reflect a valuation increase.
That means, folks, that it's time the board got the pruning shears out.
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