XVIII. Tax rates and calculation

Setting rates

Tax rates must be in the hands of the county clerk before Sept. 1 in order to receive revenue from any year’s tax bills. Rates must be set in an official board meeting. Details often make this process quite confusing.

Two funds and rates

The township has two funds and two tax rates: general revenue and road and bridge. There are maximums for each in the state constitution and maximums in more than one statute, which may not all agree. One important date is Nov. 4, 1980, which was the adoption date of what is called the Hancock Amendment. Any rate above what was levied on that date requires voter approval.

The general revenue levy rate maximum is 10 cents per hundred dollars' assessed valuation. This must be adjusted each odd-numbered year when taxable property is revalued for tax purposes. If total valuation goes up, the tax rate generally must be reduced to produce no more taxes than before, adjusted for new construction. If total valuation goes down, the tax rate sometimes can be raised, but this usually is more difficult.

The road and bridge base levy is 35 cents (137.585), with an optional increase to 50 cents authorized in 1978 (Article X, Section 12[a]). Such an increase requires one-time voter approval before the change becomes permanent. Above this level, an additional 35 cents can be levied, but only for four years before it rolls back and voter approval is required again.

Adjustments

Rollbacks below the maximum allowable required by changes in assessed valuation can be nullified with voter approval. If a 50-cent rate, after adjustment, came to 43 cents, a simple majority vote can authorize its increase back to 50 cents. This will, of course, last only until the next rollback occurs in the next odd-numbered year.

Each year, a tax rate ceiling is established, confirmed by calculations reported on forms sent by the state auditor through the county clerk to allow for the increases in assessed valuation. These set the maximum amounts that can be levied without going back to the voters.

Bond issues

Long-term borrowing requires bond issues, which each have a levy above the base amount. These levies are recalculated each year against assessed valuation for that year. Levy amount maximums are whatever it will take to produce loan payments due in the coming year, with reserve funds restricted to one year's interest and principal.