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Archive for Thursday, March 31, 1994

ERROR INFLATES VALUATION TOTAL BY $50 MILLION

March 31, 1994

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Property tax rates will not come down as much as county officials thought. Appraisers have found a $50 million error in the total valuation estimate.

An error the size of the period at the end of this sentence made the county's total valuation estimate about $50 million too high.

A shift in a decimal point a few places to the right on a single valuation notice resulted in the mistake, Douglas County Administrator Craig Weinaug said Wednesday. The mistake was caught on the notice before it was sent, he said, but was not changed on the logs until after the computer added the total.

County Appraiser Marion Johnson said he could not identify the parcel owner because the incorrect notice had been thrown away and the computer data had been corrected.

The error means that the average property owner will not see the expected drop in the property tax rate that would accompany a huge increase in total valuation, he said.

The total assessed value of the county's real estate is now estimated to be $333 million, a 10 percent increase over last year.

"The actual number will be lower than that because appeals always lead to a reduction," Weinaug said. "That would probably have a minimal effect on the actual levy."

The first try at an estimate indicated an increase of 27 percent over 1993 valuation.

Assessed value and tax levies are married concepts. Once each taxing body sets its budget, that spending is spread over the total valuation. The rate each property owner will pay is called a mill levy. When total value goes up faster than spending, the levy goes down.

Once the levy is set, your tax bill can be figured. A mill is $1 of tax for every $1,000 of assessed valuation.

Your tax bill is the answer to a word problem, the kind you dreaded in school: The state assesses houses, for property tax purposes, at 11.5 percent of their appraised value. If a homeowner's house is worth $80,000, and the levy is 116.717 mills, what will your tax bill be? Please show your work.

Here it is:

$80,000 times 11.5 percent is $9,200. That number divided by 1,000 and multiplied by the mill levy is $1,073.80, the amount of your tax bill.

The lower the mill levy, the lower the tax bill. The bigger the difference between total valuation and budgets, the lower the mill levy.

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