County Ad Valorem Tax Season Arrives

So you own a house that's worth around $80,000.

You're an average homeowner in the Oklahoma City area, according to the Metropolitan Realtors Association.

But you may have a different perspective about property taxes - like them or not - depending on whether you're fortunate enough to own that home outright and have no mortgage payment. Or, if you're still one of the many unlucky ones still making monthly mortgage payments.

If you own that home, you've received an ad valorem or property tax bill from your county treasurer several weeks ago.

You know exactly how much your property taxes are. Comparing the bill with your last year's records will tell you immediately if your tax is the same or has gone up.

However, if you and the mortgage company own your home, you may not find out until January if your property taxes have gone up. The mortgage company receives your tax bill because they pay the tax.

All you get is a notice.

The mortgage company collects one-twelfth of the property tax from you every month. It is included in your payment along with the insurance on the property and the principal and interest on your loan.

If your taxes have gone up, your first clue comes in January when the mortgage company adjusts your loan payment.

For everyone, property taxes are due Dec. 31 of each year. Or, one-half must be paid by Dec. 31 and the second half must be paid by the following March 31 to avoid penalties. Mortgage companies generally pay the entire tax by Dec. 31. Homeowners can pay theirs in two installments if they desire. There is no penalty as long as the two installments are paid by the deadlines.

If you want to know how your property tax is figured and where your money goes, follow the steps below. The math's not difficult.

It's the terminology that is sometimes cumbersome and confusing.

To begin, everyone's property tax bill is different. This difference begins with the value of the home and other property they own.

This value is determined using a formula adopted statewide, and homes are supposed to be reassessed at least once every four years.

The formula begins with the sale prices of surrounding homes, which are used to estimate the market value of a home.

Then the county assessor gets to set the tax ratio the county will use to assess taxes. State law allows the assessor to set the ratio anywhere from 9 percent to 15 percent, depending on the county's financial needs.

Grady, Kingfisher, Lincoln, McClain and Oklahoma counties use an 11 percent ratio. Canadian, Cleveland, Logan and Pottawatomie counties use 12 percent.

Once the assessor determines the ratio, the market value is multiplied by the ratio to determine the net assessed value. In Oklahoma County, for example, the net assessed value would be 100 percent of the estimated market value.

The next step is to file for a homestead exemption. This will cause the county to subtract $1,000 right from the net assessed value of a home.

This can save big bucks on your tax bill, but only for the home in which you live. Folks with an income of $10,000 or less may also be eligible for another $1,000 exemption.

Call your county assessor for information on homestead and low-income exemptions.

The net assessed value of your property, minus exemptions, is then multiplied by the millage rate, the amount of property tax owed for every $1,000 in assessed value, charged by the county, city, school district and vocational-technical school district where the property is located.

Property taxes are the primary local source of money for county government, school district and vocational-technical schools.

Property taxes can also pay for county health departments and library systems.

Money collected by the county is used to operate the county, pay salaries, build roads and operate the jail.

Property tax money designed for the library and health departments is used to support those agencies.

The countywide school levy is divided up between all the school districts in the country and goes into the district's general fund.

Only school districts must ask voters every year to renew their property tax levies.

In addition, all of these government bodies, and cities, too, can levy property taxes, with the voters' approval, to pay off bonds issued to pay for capital improvement projects.

Capital improvements include such things as building and repairing roads, bridges, buildings, sewer systems and water system; buying land for these projects; and buying equipment such as computers, heating and air-conditioning systems; and school buses.

Cities, counties and school districts sell bonds to investors so they can complete these projects now, and then pay the bond holders back over time, plus interest, with money raised by the property tax levy.

After voters approve a bond issue, a millage rate is assigned to each property owner to cover the amount borrowed from bond purchasers. This is called a sinking fund because the amount owed decreases, or sinks, with each payment. When the bonds are paid off, the millage is removed from everyone's tax bill.

As old bonds are paid off, however, most cities and school districts ask voters to approve new bonds to pay for more improvements and to keep the tax level even from year to year.

The only other way property taxes can increase is if a court issues a judgment. This also can be placed on citizens' ad valorem tax bills.

This is what happened in Mustang a few years ago. The court assigned a judgment against the city of Mustang to be repaid by property tax, and all property owners there have a portion of it added to their tax bill.

Here is a list of cities now paying off bonds with property tax, and the amount collected from property owners on each $1,000 of assessed valuation: Dibble, $6.95; Newcastle, $4.87; Shawnee, $4.17; Nichols Hills, $22.82; Bethany, $15.82; Del City, $19.99; Midwest City, $1.89; and Spencer, $5.34.

No cities or towns in Logan or Kingfisher counties have sinking funds.

In the El Reno School District, property taxes went up $11.76 per $1,000 of assessed valuation this year because residents approved a bond issue to build a new school, to update others and buy buses.

Voters in Noble will see a significant property tax increase for 1995. Cleveland County Assessor Karen Porter Young said this is because voters approved both school and city bonds recently.

The school district levy went from $7.60 to $22.98 per $1,000 of assessed value. The city levy went from $18.78 to $23.64 per $1,000 of assessed value.

Noble residents have a total tax bill of $121.314 per $1,000 of assessed valuation. The owner of an $80,000 home in Noble paid $855.87 in taxes last year. This year, the owner will pay $1,043.30 in property taxes on the same home.

Oklahoma City is holding a bond election Tuesday asking voters to approve $220,745,000 in bonds to repair streets and bridges, construct traffic and drainage control, repair and update parks and recreation centers, build a central emergency communications center in combination with a municipal service complex, and complete the next planned phases of the animal welfare center.

So, if you lived in the Oklahoma City limits, what will this do to your property taxes if it's approved?

The answer is not much.

Last year the city collected $.0155 on each $1,000 of assessed value of residents' property. If you own an $80,000 home and you live in it in Oklahoma County, Oklahoma City, the Oklahoma City School District and Vo-Tech District No. 22, you paid $120.90 in taxes to the city last year.

If voters approve the bonds, the tax will be about $.016 or $124.80. This represents an increase of only $3.90 a year over what was paid last year.

Some of the city's bonds were paid off in October, and the tax rate now sits at $.01215. So if voters don't approve the bonds, the city's portion of tax on that $80,000 home will be $94.77.

If voters reject the bonds Tuesday, the owner of this $80,000 home will have a gain of only $30.03 over last year's taxes.

City Finance Director Glenn E. Deck said if voters approve the bonds, the average mill levy will be about 16 mills.

"Sometimes it is a little below 16 mills and sometimes a little above but we try to stay as close to a 16 mill average as possible," he said.

One of the factors which determines this is that the bonds are sold in the spring and the assessed value of property is set in August, he said.

"If the assessed value goes up, the amount of money the city collects is larger," Deck said.

The largest portion of the tax goes to support the public schools. In most counties two-thirds to three-fourths of the money goes to the schools to pay for salaries and books and all the other things it takes to keep the school doors open.

In these examples the dollar amounts listed for school districts are collected for each $1,000 of assessed valuation: Putnam City, $54.97; Deer Creek, $72.04; Millwood, $73.85; Western Heights, $53.26; Edmond, $61.40.

Vo-Tech districts also collect some of the tax, most are getting the maximum, $15, which is set by statute.

Counties also collect some of your property tax. The amount varies from county to county but in general it follows a set form, with some variations. For example, some counties do not have county libraries. Oklahoma County collects $20.62 on each $1,000 of assessed valuation. BIOG: NAME:

Archive ID: 632002