A recent Press News article reported the 2018 property valuation for Mitchell County at $683,812,625. The Iowa Department of Management data shows total valuation at $893,156,223. The difference ($209,343,598) is property designated as Tax-Increment Value (TIF).
So how does this affect taxpayers?
The Supervisors discuss and approve the annual county budget after a public hearing. Then property tax rates are calculated to fund county services.
The Auditor must use the lower valuation figure ($683,812,625) which results in a 24 percent higher tax to those properties NOT held in TIF Districts.
Properties in TIF Districts still pay tax toward the annual budget, but the base value is frozen while the property remains in TIF.
The “increment” is used to pay debt.
Currently, 76 percent of the valuation of county property provides 100 percent of revenue needed for the annual county budget.
According to Debt Service Schedules provided by the County Auditor’s Office the interest payable on Mitchell County debt will be $1,119,654 for 2019.
By the time CURRENT county debt is fully paid in 2032 the interest costs will add up to $15,822,364. The principal payments will amount to around $35 million.
The Iowa Department of Management REQUIRES “TIF debt must be counted against the County’s Constitutional Debt Limit”.
Mitchell County’s per capita debt is $3,381, the highest of all 99 counties. Our county has the 2nd highest debt-to-value ratio.
True transparency is available to view either on their website or the Iowa State Association of Counties website.
The county’s “Financial Advisor” and one supervisor want to add another $5-6 million to the county’s debt. Supervisors have agreed on about $3.6 million so far. Why not pay down the debt instead?
A million dollars invested in economic development instead of paying interest keeps ALL those windmill dollars in Mitchell County.
Tax-Increment Financing does exactly what the name implies-incrementally raises taxes-on everyone.
County residents can halt new borrowing action by petition. It’s called a Reverse Referendum.