Tax Abatement
An issue that has caused a lot (I mean a lot) of discussion over the years is residential tax abatement. There are many pros and cons about the concept and I have heard them all. What I have found is that people are either for it (because it creates tax base and jobs), or against it ( because it gives property owners something for nothing). There is very little in between.
While I have been a supporter of tax abatement, there have been legislative changes that have really minimized the impact, at least residentially. When originally adopted, the program abated taxes 75% the first year, 60% the second year and 45%, 30% and 15% each succeeding year. At that time, tax abatement really had an impact on taxes paid!
However, since 2004 tax abatement has been limited to “only” the first $75,000 of taxable value for a 4-year period. Consequently, a home valued at $300,000 pays tax on $225,000. Similarly, a home valued at $125,000, pays tax on $50,000.
As anyone can easily see, the present tax abatement really helps “affordable” home owners and does much less (percentage-wise) for “well-to-do” homeowners. One of the biggest arguments against tax abatement was that it favored those who could afford very expensive homes. Well, such is not the case anymore.
And, perhaps that is the way tax abatement should be. That is, it helps homeowners who need it most. I have shared these comments with some of the biggest tax abatement opponents and they tend to agree with the current formula.
Another factor recently changed is that a home improvement can be eligible for abatement by increasing the home’s value by only 10%. This is a reduction of 5% (was 15%) and does even more to help existing homeowners get a tax break similar to new homebuilders.
As always, if you have questions or comments, feel free to contact me.
Tuesday, April 22, 2008
Fire/Police Renovation/Expansion
Another question I receive about the Fire/Police renovation/expansion is:
Why is sales tax preferred instead of property tax?
There are several issues the city council considered when deciding to finance the project with a sales tax. They are:
· Indianola Fire/EMS Department provides service for about 118 square miles of county property, yet, Indianola only occupies about 9 square miles
· Sales tax is paid by those who shop in Indianola compared to property tax that is only paid by Indianola property taxpayers
· The sales tax will generate more revenue annually than a property tax—about $820,000 compared to $592,000 (using a $1.40 tax rate increase)
· The sales tax will be in place for only 10 years versus property tax for 15 years
· Sales tax is not paid on food, medical supplies, vehicles, gasoline and farm equipment
· Sales tax cost per family is about $60annually (based on $500/month taxable purchases) compared to $125 annually (based on $200,000 home)
· Once approved by referendum, sales tax revenue cannot be spent on any other projects unless another vote passes
· The sales tax will provide enough revenue to contribute $50,000 annually for property tax relief--$50,000 would result in a 12-cent tax rate reduction for Indianola property taxpayers
· Sales tax requires a 51% approval versus 61% for property tax
It was with much thought and consideration that our elected officials preferred the sales tax. Again, if you have any questions, please do not hesitate to contact me.
And, do not forget to vote on July 8 at the Warren County Administration Building, 301 North Buxton.
Another question I receive about the Fire/Police renovation/expansion is:
Why is sales tax preferred instead of property tax?
There are several issues the city council considered when deciding to finance the project with a sales tax. They are:
· Indianola Fire/EMS Department provides service for about 118 square miles of county property, yet, Indianola only occupies about 9 square miles
· Sales tax is paid by those who shop in Indianola compared to property tax that is only paid by Indianola property taxpayers
· The sales tax will generate more revenue annually than a property tax—about $820,000 compared to $592,000 (using a $1.40 tax rate increase)
· The sales tax will be in place for only 10 years versus property tax for 15 years
· Sales tax is not paid on food, medical supplies, vehicles, gasoline and farm equipment
· Sales tax cost per family is about $60annually (based on $500/month taxable purchases) compared to $125 annually (based on $200,000 home)
· Once approved by referendum, sales tax revenue cannot be spent on any other projects unless another vote passes
· The sales tax will provide enough revenue to contribute $50,000 annually for property tax relief--$50,000 would result in a 12-cent tax rate reduction for Indianola property taxpayers
· Sales tax requires a 51% approval versus 61% for property tax
It was with much thought and consideration that our elected officials preferred the sales tax. Again, if you have any questions, please do not hesitate to contact me.
And, do not forget to vote on July 8 at the Warren County Administration Building, 301 North Buxton.
Monday, April 14, 2008
Fire/Police Renovation/Expansion
As you’ve read here and elsewhere, citizens will vote on July 8 to enact a 1-cent sales tax to renovate/expand our Fire, Police and municipal building. This is an extremely important question that citizens must address and I have been asked many questions about the project. One of the most common questions is listed below.
Question: Why not build across the street on land already owned by the city?
Answer: Building a new Fire Station across the street was thoroughly considered. It was not recommended for the following reasons:
· Expanding the Fire Department resulted in 2,500 more square feet than building new.
· A new Fire Station provided little assistance to the Police Department which also has space shortages
· The Fire and Police Departments cooperate daily and even share an administrative staff person. Splitting the departments would result in additional staff costs
· The existing building has roof, heating, air conditioning and structural problems that would still have to be fixed resulting in extra cost
· A new building would result in taxpayers maintaining two buildings instead of just one. Two boiler systems, two air conditioning systems, two roofs, etc.
· Family Video bought the land for $450,000 and pays about $40,000 annually in city, county and school taxes
· The current building houses not only Fire and Police, but also the Clerks Office, Community Development, Mayor and Manager. There are significant economies experienced by having all those departments under one roof
As you can see, there are many reasons to expand the existing site as opposed to building across the street. It is more efficient, cost saving and provides more space for the dollars spent.
I will continue to update this blog with other Fire/Police Building renovation questions because this is such an important issue for Indianola residents. If you have specific questions, feel free to email me at tzisoff@cityofindianola.com. I will not only respond to your email, but will answer them here so that all residents can have the same information.
As you’ve read here and elsewhere, citizens will vote on July 8 to enact a 1-cent sales tax to renovate/expand our Fire, Police and municipal building. This is an extremely important question that citizens must address and I have been asked many questions about the project. One of the most common questions is listed below.
Question: Why not build across the street on land already owned by the city?
Answer: Building a new Fire Station across the street was thoroughly considered. It was not recommended for the following reasons:
· Expanding the Fire Department resulted in 2,500 more square feet than building new.
· A new Fire Station provided little assistance to the Police Department which also has space shortages
· The Fire and Police Departments cooperate daily and even share an administrative staff person. Splitting the departments would result in additional staff costs
· The existing building has roof, heating, air conditioning and structural problems that would still have to be fixed resulting in extra cost
· A new building would result in taxpayers maintaining two buildings instead of just one. Two boiler systems, two air conditioning systems, two roofs, etc.
· Family Video bought the land for $450,000 and pays about $40,000 annually in city, county and school taxes
· The current building houses not only Fire and Police, but also the Clerks Office, Community Development, Mayor and Manager. There are significant economies experienced by having all those departments under one roof
As you can see, there are many reasons to expand the existing site as opposed to building across the street. It is more efficient, cost saving and provides more space for the dollars spent.
I will continue to update this blog with other Fire/Police Building renovation questions because this is such an important issue for Indianola residents. If you have specific questions, feel free to email me at tzisoff@cityofindianola.com. I will not only respond to your email, but will answer them here so that all residents can have the same information.
Tuesday, April 8, 2008
Sustainability
There are lots of buzzwords out there including "growing green", “smart growth”, "eco communities" and "sustainability" that describe individual, organizational and community efforts to reduce energy consumption, reduce waste and increase quality of life. With concerns about oil dependence, global warming and other environmental issues, it is no wonder sustainable communities are becoming the new fad! However, is it a fad?
For me, I think not. I believe there is a much greater societal consciousness today about our environment and that people are willing to do something about it. In Indianola, for example, Mayor Kelley is forming a citizen/staff committee to review methods of improving Indianola's quality of life by looking at energy use, building codes, transportation systems and many more issues that affect our daily lives, and just as importantly, the lives of future citizens.
I will continue to update this blog as to the city's progress on sustainability which is best defined as "meeting a community's needs today without compromising the needs of the community tomorrow".
I truly believe sustainability, smart growth and growing green are one of the biggest challenges facing cities today. Our future depends on how we all deal with these issues.
There are lots of buzzwords out there including "growing green", “smart growth”, "eco communities" and "sustainability" that describe individual, organizational and community efforts to reduce energy consumption, reduce waste and increase quality of life. With concerns about oil dependence, global warming and other environmental issues, it is no wonder sustainable communities are becoming the new fad! However, is it a fad?
For me, I think not. I believe there is a much greater societal consciousness today about our environment and that people are willing to do something about it. In Indianola, for example, Mayor Kelley is forming a citizen/staff committee to review methods of improving Indianola's quality of life by looking at energy use, building codes, transportation systems and many more issues that affect our daily lives, and just as importantly, the lives of future citizens.
I will continue to update this blog as to the city's progress on sustainability which is best defined as "meeting a community's needs today without compromising the needs of the community tomorrow".
I truly believe sustainability, smart growth and growing green are one of the biggest challenges facing cities today. Our future depends on how we all deal with these issues.
Wednesday, April 2, 2008
MORE ON W. EUCLID
A preconstruction meeting was held on March 25 and the following "tentative" schedule was provided. I stress tentative because weather and other factors can and will affect the project.
The contractor is Nuckolls Construction Services
The engineer is Veenstra and Kimm
Project is divided into two phases--east end to "W" is phase 1; "W" to "Y" is Phase 2
Paving will extend to about 90' east of "Y" Street
Nuchols may begin work on the box culvert (east end) April 7
Phase 1 clearing and grubbing may begin April 7
Phase 1 underground utilities, subdrain work may begin May 7
Paving Phase 1 may begin June 19
Phase 2 may begin July 22
Phase 2 subdrain work may begin July 31
Paving Phase 2 may begin August 6
Sidewalks and driveways on the entire project may begin August 21
Project completion is estimated for September 11
The contractor has 90 working days to complete project
I hope this is helpful and again, I need to stress "tentative". The above information provides residents a general timeline for the project.
A preconstruction meeting was held on March 25 and the following "tentative" schedule was provided. I stress tentative because weather and other factors can and will affect the project.
The contractor is Nuckolls Construction Services
The engineer is Veenstra and Kimm
Project is divided into two phases--east end to "W" is phase 1; "W" to "Y" is Phase 2
Paving will extend to about 90' east of "Y" Street
Nuchols may begin work on the box culvert (east end) April 7
Phase 1 clearing and grubbing may begin April 7
Phase 1 underground utilities, subdrain work may begin May 7
Paving Phase 1 may begin June 19
Phase 2 may begin July 22
Phase 2 subdrain work may begin July 31
Paving Phase 2 may begin August 6
Sidewalks and driveways on the entire project may begin August 21
Project completion is estimated for September 11
The contractor has 90 working days to complete project
I hope this is helpful and again, I need to stress "tentative". The above information provides residents a general timeline for the project.
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