Property tax management can be confusing for local taxpayers.<\/p>\n
The mill rate is the amount of tax payable per dollar of the assessed value of a property. A “mill” represents one-tenth of a cent with the rate normally expressed as the amount per $1,000 of property value.<\/p>\n
In recent City and Borough of Juneau Assembly action, the mill rate for the 2020 fiscal year was approved at last year’s level after an unusual split vote<\/a>. Typically, this part of the municipal budgeting process rarely raises controversy.<\/p>\n Holding the mill rate stable over time is admirable but, as most people know, even if the mill rate remains unchanged, your property tax usually increases. That’s because our current mill rate, 10.66 mills (or 1.066% of your property value), is only part of the equation. The other part is the value of your property as assessed by the city — which tends to increase every year with inflation.<\/p>\n [City might make offer on waterfront property<\/a>]<\/ins><\/p>\n In other words, if the Assembly wanted to hold your property tax constant or even reduce it, it would have to lower the mill rate enough to compensate for the annual increase in assessed property values.<\/p>\n The city manager initially proposed lowering the mill rate from 10.66 to 10.56 mills for FY 2020. The Assembly Finance Committee then recommended leaving the existing mill rate unchanged at 10.66. When the Assembly voted on it in their June 3 meeting<\/a>, Assembly member Mary Becker moved to roll it back to 10.56 mills. She cited the urgency in lowering the cost of living and housing costs, specifically, as the reason for her concern. Others mentioned uncertainty about the amount of school bond debt reimbursement as a reason for the higher amount. The motion failed with a 4-4 tie vote.<\/p>\n But did the Assembly really “hold the line” on property taxes?<\/p>\n Here is where it gets complicated. Part of the mill rate is reserved for debt service. But because we have continued to pay off CBJ bonds, our mill rate for this portion was reduced. What the Assembly actually did was reduce the debt service mill rate and increase the operational mill rate an equal amount of 10 mills — a wash to the taxpayer. But, along with higher property values, this action effectively increases property tax receipts over $1 million for the city treasury next fiscal year.<\/p>\n And if budget fears don’t materialize, what happens with that extra tax money? Assembly member Rob Edwardson stated it best, asking, “are people going to get a rebate? I don’t think so.”<\/p>\n And indeed, recently the Legislature agreed on a compromise budget that preserved full funding for school debt reimbursement.<\/p>\n [Eaglecrest proposes new summertime activities to attract tourists<\/a>]<\/ins><\/p>\n