News of a drop in annual borough sales tax revenue should've come as no surprise this week.
The forecast of about $26.5 million for FY2010 is about $1.7 million, or 6 percent below what had been predicted. Borough finance director Craig Chapman expected it; borough Mayor Dave Carey expected it.
And looking around the business communities on the Peninsula, we should've been expecting it, too.
Then we learn that real property tax assessments rose a modest 0.9 percent. Certainly there are some property owners who will look at this year's assessment and wonder what mansion the borough assessor thinks they own. On the other hand, some property owners will have seen assessed values go down and think to themselves: "About time."
The bottom line for the borough's finances: no surprise on the revenue drop, and properties are worth a little more than last year.
It's the perfect scenario for exactly what the professed fiscal conservative Mayor Carey is proposing -- a slight reduction in the coming year's mill rate.
Property values go up and down according to the market, and a taxing authority like the borough can only try to closely mirror that fluctuation. But where it really matters is when the mayor and the borough assembly agree on what to tax against that value. That's the mill rate.
Makes perfect sense. Carey can lower the mill rate and honestly claim a tax reduction. A lower rate could be somewhat mitigated by the slight increase in assessments. Carey gets to keep his promise and the borough's property tax revenues don't take such a hit.
Political economics 101.
Feel better about your property assessment now?
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