The State property tax rate to pay for General Obligation bonds is held constant. In each bond cycle, the DFA* and LFC** determine a total capacity available based on paying off bonds sold ten years ago and on current property valuation. Using a constant property tax rate of 1.36 mills, the State Board of Finance calculates the amount of available bond capacity. This year, that amount is $199,402,049, which the 2020 legislature divided up into three categories:
A. Senior Centers - $10,770,000
B. Libraries - $9,751,433
C. Academic Construction - $156,358,475
Since the amount allocated to the libraries in the 2018 bond issue was $12,876,000, this year's amount is 32% less than the last cycle. The amount of millage devoted to paying off the 2020 library bond will be correspondingly less than in 2018. But within the total package, the library bond is still only 5% of the total. The State uses the example of the property tax cost to a homeowner of a home valued at $100,000. There is a variable that when the value of a property increases over past years, the tax will be correspondingly greater.
If all three ballot issues are approved by the voters in November 2020, the average cost to the owner of a property worth $100,000 over a 10-year period will be $10.99 per year. Of that $10.99 average cost per year, $1.83 is attributable to the senior facilities bond, $0.54 to the library acquisitions bond and $8.62 to the higher education bond. If any or all of the 2020 bond issues were defeated, the State property tax mill rate could be expected to decline modestly.
By Joe Sabatini
*Department of Finance and Administration - The Executive Department that manages state finance
**Legislative Finance Committee - the Legislature's interim joint committee on budgets and capital projects