Warning: Huge Property Tax Hike Coming
The FAQs of Life About the Proposed School Bond Levy 17-94
Let me shed a little light on the cost of the proposed school bond in Grants Pass. I’ll use the format of a FAQ or frequently asked questions section of websites.
Q: How much does the school bond levy cost?
A: $2.59 per thousand
Q: Per thousand of what?
A: Your home’s assessed value.
Q: Is that what I paid for my home?
A: No, it’s 90% of the assessed value of 1995-96, plus up to 3% per year.
Q: Are you serious?
A: Yes. This is a serious matter.
Q: If my home goes down in value by 5% next year, will my assessed value go down by 5%?
A: No, it’s more likely to go up by 3%.
Q: Uh, okay. I paid $300,000 for my home which is assessed at $250,000. How much will I pay for the bond levy?
A: You’ll pay $2.59 per thousand.
Q: No, I mean in dollars. How much will I pay each year?
A: In year 1, you’ll pay $648 for the school bond levy.
Q: What do you mean by, “In year 1”?
A: In year 2, you’ll pay $667 for the school bond levy.
Q: Why will it go up?
A: Because your home’s assessed value will go up by 3% to $257,500.
Q: How long will this go on?
A: For up to 10 years.
Q: What will my payment be in 2030 if my assessed value goes up by 3% for 10 years?
Q: Why so high?
A: Because your home is now assessed at $316,692.
Q: Do total assessed property values need to go up by 3% per year to get the $2.59 bond levy rate?
A: No, the bond analysis assumes that total assessed property values go up by 4% for the next ten years.
Q: Wait. Aren’t property tax assessment increases capped at 3%?
Q: How can total assessed values increase by 4% per year if individual homes can only increase 3%?
A: That’s an interesting question. Don’t you need to walk your dog or something?
Q: Did you forget I’m the one asking questions? How can total values increase by 4% per year?
A: There are several ways. Homes and commercial buildings can be built on vacant lots. Upgrading existing homes and commercial buildings will do it as long as the property is outside the city’s Urban Renewal District. In that case the URD gets the incremental increased property taxes. Finally, the City of Grants Pass and the school district to increase by 33%. However, annexations of county real estate is complicated and unpopular so let’s ignore that option.
Q: Whatever. Have total property values increased by 4% per year for the past ten years?
A: In 2018, yes. In the other 9 years, no.
Q: If total assessed values increase by less than 4% each year for the next ten years, how will the school district make the bond payments?
A: The school bond levy would increase from the estimated $2.59 per thousand.
Q: Does this mean in a recession, property values fall and property development stalls, my property tax goes up?
A: Yes. The bondholders must be paid. The bond payments are an obligation of the district.
Q: And my obligation is to pay my property tax bill whatever it is?
A: Yes. You got it.
Q: What else can make the estimated $2.59 go up?
A: The bonds will be issued at market interest rates. If rates go up by more than 1% from today’s rates, the $2.59 bond levy rate will be increased.
Q: Can anything happen to cause the $2.59 bond levy rate to go down?
A: If you call a football a pig, then yes pigs can fly.
Q: Can you answer my question, please?
A: Yes. The $2.59 can go down if total real estate assessed values increase by more than 4%. That last happened in 2009. The $2.59 rate can also go down if the bonds are issued when interest rates are lower.
Q: Aren’t interest rates at near all-time lows?
A: Yes. This is unlikely to happen.
Q: Should I plan on paying higher property taxes for the next ten years?
A: If the school bond pass, yes. I suggest you pad your estimate because your property taxes will be going up.
Q: If this school bond passes, I know my property tax will go up 19% now and even more in the years ahead. Why should I vote for new schools with this new levy?
A: For the children. New schools cost money.
Q: Are you referring to the bondholders’ children?
A: You’re such a wit.
Q: I’m voting no on the school bond. We can’t afford brand new middle schools. I can’t afford higher property taxes. Thank you for your time. This has been most enlightening.
A: You’re welcome. Glad to be of service.
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