Savings now or savings later
Well, since Dave Miller says he's reading my tax stories, here's another one for ya.
A budget resolution is the first item on the agenda Monday night for the Grand Forks City Council. The council is using the resolution to tell the mayor publicly that it wants a 6.5 mill cut to the property tax levy.
The administration looks like it'll go along, but it's advising the council to only cut the levy by 3.63 mills. Most of the difference is in the dike levy, which the council wants to cut by 2.5 mills and the administration doesn't.
The philosophical debate comes down to this: If there's no cut, homeowners could expect to save $51.75 per $100,000 value of their home starting in 2015. If there is a cut, homeowners will save $11.25 a year immediately.
It's like your credit card. You pay off the principal, in this case the city's share of the dike project, early, you save on interest. If you don't, you do pay interest but the debt payments are gradual so you have more money to spend right now.
The first thing that struck me was that the savings are pretty modest either way. For every $100,000 value of your home, you're paying about $2,200 now to the city (the rest goes to the school and park districts and the county). It might mean a lot to a senior citizen on a fixed income, though. I don't know.
What's your opinion, blogosphere? Is this just a political move or do you still appreciate the savings?
You can read more in my story here. (This is a query to the Herald search engine so don't expect anything until the story's gotten on the Web.)
Tune in to Channel 2 at 7 p.m. if you want to watch the council debate.
Update 1:31 a.m., 6/27/06: So I finally figured out what Conservative Yahoo wanted. What will you save total, assuming your house never increase in value and assuming it's worth $100,000?
If the council cuts the 2.5 mills now, you'll save $168.75 over 15 years starting in 2007. If it pays off them dikes early, you'd save $362.25 over seven years starting in 2015.
A budget resolution is the first item on the agenda Monday night for the Grand Forks City Council. The council is using the resolution to tell the mayor publicly that it wants a 6.5 mill cut to the property tax levy.
The administration looks like it'll go along, but it's advising the council to only cut the levy by 3.63 mills. Most of the difference is in the dike levy, which the council wants to cut by 2.5 mills and the administration doesn't.
The philosophical debate comes down to this: If there's no cut, homeowners could expect to save $51.75 per $100,000 value of their home starting in 2015. If there is a cut, homeowners will save $11.25 a year immediately.
It's like your credit card. You pay off the principal, in this case the city's share of the dike project, early, you save on interest. If you don't, you do pay interest but the debt payments are gradual so you have more money to spend right now.
The first thing that struck me was that the savings are pretty modest either way. For every $100,000 value of your home, you're paying about $2,200 now to the city (the rest goes to the school and park districts and the county). It might mean a lot to a senior citizen on a fixed income, though. I don't know.
What's your opinion, blogosphere? Is this just a political move or do you still appreciate the savings?
You can read more in my story here. (This is a query to the Herald search engine so don't expect anything until the story's gotten on the Web.)
Tune in to Channel 2 at 7 p.m. if you want to watch the council debate.
Update 1:31 a.m., 6/27/06: So I finally figured out what Conservative Yahoo wanted. What will you save total, assuming your house never increase in value and assuming it's worth $100,000?
If the council cuts the 2.5 mills now, you'll save $168.75 over 15 years starting in 2007. If it pays off them dikes early, you'd save $362.25 over seven years starting in 2015.
posted by Tu-Uyen at 9:09 PM
1 Comments:
It would have been nice to se the figures for what the actual interest costs the property taxpayer and how it would change with between teh options.
Nice article, Tran.
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