Where do all my tax dollars go?

Breaking it down shows how it adds up

These are the days of big numbers at Lawrence City Hall.

Administrators and commissioners are up to their necks in budget numbers, and most of the figures are in the millions: a $152 million proposed budget; $24 million of property taxes; $860 million of taxable property in the city.

It can be easy to let all the numbers just go over your head. After all, about the only thing most of us know about that type of money is that it’s a lot more than we have.

But there is another way to look at the city’s budget. You can take it down to the microscopic level, and put it in terms that we can all understand: a monthly bill.

For 2008, an owner of a $200,000 home will pay $616.12 in property taxes to the city. Divide by 12 and you come up with a monthly total of $51.34.

But that doesn’t really give you the full picture. This doesn’t account for school or county property taxes. Also, you pay a lot in sales taxes, too. And it doesn’t give you a very detailed picture either. What if you wanted to know how much you were paying each month in taxes to support the fire department or parks or streets?

That’s what the accompanying graphic tries to convey. Although it is not exact – it could vary, for example, based on how expensive of a car you drive and pay taxes on – but it should give you a ballpark idea of which services get a lot of your money and which services get a little of your money.

Here’s a few words on how we put this together:

¢ All the numbers are for the 2008 budget. In other words, this is a representation of what you are paying now, not a projection of what you may be paying in 2009.

¢ The property tax figure is based on owning a $200,000 home. The sales tax figure represents how much of every dollar you pay to the city in sales tax goes to a particular service. Remember, the city shares sales tax collections with the county and state.

¢ We attempt only to show you what you’re paying in terms of property taxes and sales taxes. Remember, though, that the city receives money from lots of other sources as well. There are fees charged by the municipal court and parks and recreation. Utility companies pay a franchise fee. And, of course, almost everybody pays a water and sewer bill to the city.

¢ Keep these numbers in mind: The city’s general fund receives 23 percent of its money from property taxes; 41 percent from sales taxes; and the remaining 36 percent from miscellaneous fees and payments. Those percentages are key to the formula we used to determine many of the monthly cost estimates.

¢ And finally, one note about fees. Yes, the city has several fees that are structured to cover the cost of the service being provided. For example, court fees are set to cover the cost of court services. For the purposes of this exercise, we assumed those fees are being used to help pay for city services in general. And in reality, that is the way it works. Many city fees get collected and put in the general fund where they are co-mingled with property tax and sales tax money.

So, peruse away, but remember one other saying that is popular at City Hall these days: Pennies add up to dollars.