BACKUS – Cass County commissioners voted Tuesday to set the preliminary 2012 levy at the same dollar amount as they have levied since 2009, $19,585,613, and the Longville Area Ambulance District levy at the same $461,000 it has been since 2010.
The board will set the final levy in December, which can be the same or lower, but not higher.
Because land values have dropped and because the county lost $738,480 in state aids to offset property taxes in the last year, the county tax rate will increase 5.68 percent to generate the same dollars.
The county rate will rise from 28.573 to 30.195.
Cass’ rate will still be the lowest of eight surrounding contiguous counties, said Chief Financial Officer Larry Wolfe.
To maintain level spending, the county has had to cut $445,454 from department budgets. On Tuesday, the board asked the citizen budget committee to look in September for another $640,394 in operations cuts in order to create a 2012 contingency fund. That fund would be an offset to any further state aid cuts or emergencies in 2012.
Cass has more than 100 unique property taxing districts that represent different combinations of city/town plus school district plus county tax rates used to compute property taxes. In 2011, combined tax rates in the county ranged from 37.170 percent in Lima Township to 194.606 percent in Cass Lake.
Because the Legislature eliminated the homestead credit and instituted instead a homestead market value exclusion formula, each of those over 100 districts will be affected differently by changes in 2012.
Taxing districts that have had a higher combined tax rate, those 100 percent or higher, likely will see their property taxes drop some, while those whose rate has been under 100 percent likely will see their taxes rise. The change could be up to $300 higher per year property taxpayer.
The old homestead credit or the new homestead market value exclusion apply only to homesteaded houses with market value $413,000 or lower. The lowest valued houses get the highest credit either way, but those in the lowest taxing rate districts will see the most tax increase and loss of homestead offset in 2012.
The statewide average tax rate is over 100 percent, but Cass County taxing districts’ average rate is only about 55 percent, which means more people in this county will see their property taxes rise than people living in other parts of the state, Wolfe said.
Unfortunately, the tax increase expected here on many lower valued homes will hit the same population segment that has been hardest hit by foreclosures.
Assessor Mark Peterson reported Tuesday on foreclosures the last four years, which had peaked at 51 in second quarter 2010. This year, the second quarter foreclosures dropped to 40, in line with the 42 for the same quarter in 2008 and 2009.
There was a shift, though, away from seasonal properties to more homesteaded properties. While most Cass foreclosures have been on properties worth less than $400,000, the second quarter 2011 shows a shift to the vast majority being on homes under $200,000 value.
Peterson also reported the number of arms length properties sold dropped 8 percent the first half of this year, compared to 2010. (This does not include foreclosure sales or those transferred among family members for a nominal sum.)
The average Cass property sold in the last year has had about a $223,000 value.