Tax relief on the way

Minot residents clamoring for tax relief may actually see some when their tax statements arrive in December.

Local taxing entities still are working on their budgets, but early indications are that proposed tax requests combined with state property-tax relief could lower bills for the average homeowner by nearly 25 percent. Based on preliminary budgets and Minot’s median house assessment of $187,000, the tax reduction would be about $611 from last year’s bill of $2,480. That figure assumes an average 11 percent increase in property assessment.

Homeowners have been used to seeing property valuations rise faster than mill levies fall. But that isn’t shaping up to be true this year.

Both Ward County and Minot Park District are considering budgets that would chip away at the tax bill.

Minot City Council meets Monday to determine whether any spending changes are necessary before finalizing the city’s $192 million budget for 2014. Hearing from a crowd of tax-weary constituents last Monday, the council approved a budget on first reading that cuts the proposed tax levy by about $1.6 million. The $14.8 million tax levy remains about $2.4 million higher than 2013, but city growth and higher valuations will absorb that increase. As a result, the city’s share of the tax on the owner of a $200,000 home with no valuation change would drop by about $50 a year before state tax relief kicks in.

Taxpayers can count on having 12 percent of their property-tax bills picked up by the state through a new property-tax relief program. For example, a consolidated property-tax bill of $2,000 would become $1,760, and the state would reimburse the city, county, school and other taxing entities for the $240 difference.

Minot Public Schools will be able to significantly reduce its levy because of increased state funding provided by the Legislature to ease the burden on property owners. With state aid and rising property valuations, the school board is proposing to cut the mill levy by about 59 mills. Even after factoring in the average property valuation increase, that mill levy change reduces the amount that a homeowner would pay in school taxes by about 43 percent.

The school board also is asking voters on Dec. 10 to decide on a bond issue to build and renovate school buildings, which would raise the mill levy by 51 mills. The owner of a $187,000 home in Minot could expect to pay an additional $429 per year. That is less than the $460 savings that the owner would see in school taxes, assuming an 11 percent valuation increase. If voters approve the bond issue, the example homeowner still would save $182 in total property taxes.

Of course, the assumptions are based on preliminary budgets that could change up or down, and on the estimated value of a mill, which the county won’t officially determine until later this year.

According to the city assessor’s office, Minot has 12,740 homes on the tax rolls.

Nearly half, or about 6,200 homes, are assessed between $100,000 and $200,000. Under the city budget heading to the council for final action, the city-only property tax would fall between $354 and $707 for homeowners in this range.

About 3,500 homes are assessed between $200,000 and $300,000. The proposed city tax for these homeowners would fall between $707 and $1,061.

Another 10 percent, or about 1,300 homes, are assessed at more than $300,000. The tax on a $400,000 home in the city’s proposed budget would be $1,414.

The 1,670 homes assessed for less than $100,000 include flood-damaged homes. Many of flood-damaged homes are expected to be repaired or removed by next year, the assessor’s office reported. The median home value in Minot of $187,000 excludes properties that were flooded.