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Thread summary:

Real estate tax cuts, Cary, North Carolina, smaller budget proposed, reduction in spending, capital projects reduced, aggregate tax expenditure, economies of scale, government savings plan

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Old 05-09-2008, 05:56 PM
 
Location: In NASCAR World
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Cary has announced their 2008-2009 proposed budget which will cut the 42 cent per $100 real estate tax by about 22% to 33 cents per $100. This is great news and shows how a high population density actually saves the town money. Just another Cary model that other towns should follow. It is about economies of scale. More people paying into the system allows people to pay less.

YAHOO!!!!!!!!!!!!!!!!

Cary proposes smaller budget :: WRAL.com
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Old 05-09-2008, 06:09 PM
 
Location: Chapel Hill, NC
1,105 posts, read 2,578,362 times
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Quote:
Originally Posted by #1NascarFan View Post
Cary has announced their 2008-2009 proposed budget which will cut the 42 cent per $100 real estate tax by about 22% to 33 cents per $100. This is great news and shows how a high population density actually saves the town money. Just another Cary model that other towns should follow. It is about economies of scale. More people paying into the system allows people to pay less.

YAHOO!!!!!!!!!!!!!!!!

Cary proposes smaller budget :: WRAL.com
I think you're misreading. The N&O gives a better explanation (http://www.newsobserver.com/news/wake/cary/story/1066883.html - broken link):
Quote:
The Cary town manager is proposing a property tax rate of 33 cents per $100 valuation for the coming fiscal year, meaning the owner of a $300,000 home would pay $990 in taxes.

The proposed rate is slightly above the amount that would be "revenue neutral" under a recent revaluation of property across Wake County.

Property values generally rose under the revaluation. Because of the higher values, local governments can drop tax rates while bringing in the same amount of revenue.

Cary's current tax rate is 42 cents. Town officials said in a news release today that the revenue neutral rate would be 32.38 cents.
Regardless of the particulars of the tax code, it appears the total budget is dropping because of a reduction in spending on capital projects. (See the Town's press release (http://www.townofcary.org/news/news2008/proposedbudgetfy09.htm - broken link).) The town will be adding the equivalent of 25 1/4 additional employees, and raising some fees. In other words, the aggregate tax expenditure by residents isn't going down at all.
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Old 05-09-2008, 06:28 PM
 
Location: In NASCAR World
166 posts, read 118,484 times
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Quote:
Originally Posted by geoff2v View Post
The town will be adding the equivalent of 25 1/4 additional employees, and raising some fees. In other words, the aggregate tax expenditure by residents isn't going down at all.

I don't think you added the numbers properly. The tiny amount of fee increase is MUCH less than we will save on the lower R.E. tax. Cary has done a remarkable job of managing growth and it's infrastructure. With the economies of scale and reduced need for town repairs, the residents get a big savings. It's not too often the government gives people their money back when they don't need it.

Way to go Cary!!!
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Old 05-09-2008, 08:18 PM
 
Location: Chapel Hill, NC
1,105 posts, read 2,578,362 times
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Quote:
Originally Posted by #1NascarFan View Post
I don't think you added the numbers properly. The tiny amount of fee increase is MUCH less than we will save on the lower R.E. tax. Cary has done a remarkable job of managing growth and it's infrastructure. With the economies of scale and reduced need for town repairs, the residents get a big savings. It's not too often the government gives people their money back when they don't need it.

Way to go Cary!!!
Not adding anything. The key is that while the tax RATE is going down from 42 cents per $100 to 33 cents per $100, that rate is going to be collected on a much HIGHER ASSESSMENT. The recent Wake County reassessment showed "an average total increase in value of 43% over the last eight years" So if your house were previously assessed at $100, your tax would have been 42 cents. However, if your property value increased by that 43% figure, and so was newly assessed at $143, your new tax bill (with a 33 cents per $100 rate) would be 47.19 cents. That's actually more.

Now, apparently in Cary the average property reassessment was only 30%, what this all means is that the town would get the same amount of revenue from the *average* house today at a tax rate of 32.38 cents as it would from the *average* house last year -- at the old valuation -- with a tax rate of 42 cents. So with a tax rate of 33 cents per $100 the average homeowner is not saving 22% off his or her tax bill; that 33 cents is being collected off a higher base valuation and so the tax bill will stay about the same or a little higher.

Another way of looking at it is provided by Cary's own budget documents (http://www.townofcary.org/depts/budget/fy2009/024-revenueandexpendhistoryandgraphs.pdf - broken link). In fiscal year 2005, Cary collected about $49.3 million in property and similar taxes; in 2006, $51.2 million; in 2007, $54.2 million; in 2008; an estimated $58.1 million; and in 2009, a budgeted $63.1 million, an 8.6% increase over 2008. There is absolutely no way the Town of Cary could reduce taxes by 22% and yet get 8.6% additional revenue, particularly since the revenue increases from 2005 through 2008 occurred with a steady tax rate. Again, the decline in the tax rate is solely a function of the Wake County real property reassessment, not some remarkably governance by Cary that's resulting in a huge tax decrease.
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Old 05-09-2008, 08:25 PM
 
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But didn't property values just go way up? So, the amount of taxes being paid is about the same. This is pretty typical for most counties when values a reasessed
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Old 05-09-2008, 08:31 PM
 
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Very well put, Geoff2v.
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Old 05-09-2008, 08:53 PM
 
Location: In NASCAR World
166 posts, read 118,484 times
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Quote:
Originally Posted by geoff2v View Post
Not adding anything. The key is that while the tax RATE is going down from 42 cents per $100 to 33 cents per $100, that rate is going to be collected on a much HIGHER ASSESSMENT. The recent Wake County reassessment showed "an average total increase in value of 43% over the last eight years" So if your house were previously assessed at $100, your tax would have been 42 cents. However, if your property value increased by that 43% figure, and so was newly assessed at $143, your new tax bill (with a 33 cents per $100 rate) would be 47.19 cents. That's actually more.

Now, apparently in Cary the average property reassessment was only 30%, what this all means is that the town would get the same amount of revenue from the *average* house today at a tax rate of 32.38 cents as it would from the *average* house last year -- at the old valuation -- with a tax rate of 42 cents. So with a tax rate of 33 cents per $100 the average homeowner is not saving 22% off his or her tax bill; that 33 cents is being collected off a higher base valuation and so the tax bill will stay about the same or a little higher.

Another way of looking at it is provided by Cary's own budget documents (http://www.townofcary.org/depts/budget/fy2009/024-revenueandexpendhistoryandgraphs.pdf - broken link). In fiscal year 2005, Cary collected about $49.3 million in property and similar taxes; in 2006, $51.2 million; in 2007, $54.2 million; in 2008; an estimated $58.1 million; and in 2009, a budgeted $63.1 million, an 8.6% increase over 2008. There is absolutely no way the Town of Cary could reduce taxes by 22% and yet get 8.6% additional revenue, particularly since the revenue increases from 2005 through 2008 occurred with a steady tax rate. Again, the decline in the tax rate is solely a function of the Wake County real property reassessment, not some remarkably governance by Cary that's resulting in a huge tax decrease.

True to an extent, but not 100%. You numbers will work for someone that has been in the town for many years and their values went way up over time. However, many people have moved here within the last few years, so their values are what they were when they purchased or close to it. For these thousands of people, they will be getting a nice tax break compared to what they were paying when they first moved here.
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Old 05-09-2008, 09:01 PM
 
9,726 posts, read 28,493,194 times
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Quote:
Originally Posted by #1NascarFan View Post
True to an extent, but not 100%. You numbers will work for someone that has been in the town for many years and their values went way up over time. However, many people have moved here within the last few years, so their values are what they were when they purchased or close to it. For these thousands of people, they will be getting a nice tax break compared to what they were paying when they first moved here.

Nascarfan. You have this all wrong. Tax assessments are only updated once every 8 years at this point. Doesn't matter how long ago or how recent you purchased. Geof has explained it very well. I don't know how to make it any clearer. Very few people will see taxes decrease, for the vast majority they will remain unchanged give or take a few dollars.

This is a revenue neutral tax rate adjustment.
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Old 05-09-2008, 09:05 PM
 
Location: Cary, NC
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It looks like my taxes will go up about 12% total, Wake County and Cary combined.
I got my inflated re-assessment lowered on 2nd appeal. Lowered about 8%.
Folks who failed to appeal for a reduction will feel it more.
I appreciate my neighbors who didn't bother, for helping to hold down my taxes by overpaying, based on inflated Tax Values.

It's unfortunate for Buyers who get on board after a Seller fails to appeal the assessment.
The new owners will often pay inflated taxes due to high assessments.

Kind of a scam, when a Seller and/or real estate agent ignore an overassessment after using an inflated Tax value to try to justify the home's sales price.

Buyers should be able to appeal assessments, but I do not think this option exists.
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Old 05-09-2008, 09:10 PM
 
Location: In NASCAR World
166 posts, read 118,484 times
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Quote:
Originally Posted by North_Raleigh_Guy View Post
Nascarfan. You have this all wrong. Tax assessments are only updated once every 8 years at this point. Doesn't matter how long ago or how recent you purchased. Geof has explained it very well. I don't know how to make it any clearer. Very few people will see taxes decrease, for the vast majority they will remain unchanged give or take a few dollars.

This is a revenue neutral tax rate adjustment.

I will explain a little better. If I bought a home one year ago for $300,000, that "is" the value I am going to be taxed at. So I would have paid .42 on 100 at that value. Now I will pay .33 on 100 on the same value. That is less I would pay in taxes.

I understand your point about every 8 years for reassessments, but that does not apply to homes bought at real market value after the fact. If I bought a home last year for $300,000, the town did not tax me on a value of $200,000. Trust me, I know everytime I look at my tax bill. They taxed me at the "full" appraised value at time of purchase, not 8 years ago value. A lot of homes have been sold in the last 3 years.
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