Posted 1/06/15 (Tue)
By Amy Robinson
Farmer Staff Writer
With McKenzie County taxpayers concerned over increases in their taxes for 2014, taxpayers should also know that out of the $14,161,629 in total taxes levied by all political subdivisions in the county, 74 percent will be paid by commercial and pipeline entities, with only 26 percent paid by agricultural and residential taxpayers.
“What is important for taxpayers to know this year, is that even though their taxes have gone up, the vast majority of taxes in this county are paid by commercial and pipeline/oil companies,” said Linda Svihovec, McKenzie County auditor and acting treasurer. “Which means those entities are paying a substantial share of the taxes, for the services we use every day like roads, our schools, and fire departments.”
In 2013, commercial and pipeline/oil companies paid 71 percent of the total county taxes, and it continued to raise in 2014 to 74 percent.
“It means agricultural and residential property owners are picking up less of the tax burden,” says Svihovec.
The County Equalization meeting took place in June 2014 with the McKenzie County Board of Commissioners, where the values were set and recommendations were heard for 2014 property valuations. At this meeting, it was reported by Tax Director Katie Paulson that the valuation of certain property classifications were out of compliance with the Sales Ratio Study conducted by the State Tax Department.
The county is required by the State Board of Tax Equilization to be in a 90 to 100 percent sales ratio range, meaning commercial and residential properties in the county must be valued at a minimum of 90 percent of what similar properties are selling for. The state has the right to immediately require the designated city or county as a whole to increase valuations as they determine to be within the guidelines of the law. For that reason, the county is required to keep their values as close to market value as possible for all residential and commercial properties. That requirement ultimately led to the values being set where they were.
A general breakdown in the taxes for 2014 are as follows:
Watford City - residential taxes went up about three percent while commercial taxes went up approximately 29 percent. Watford City - rural residential taxes went up about 10 percent, rural commercial 20 percent and agricultural 19 percent.
Alexander - residential and commercial both went up 60 percent. And Alexander - rural agriculture went up 57 percent.
Grassy Butte - agricultural went up about 19 percent.
Twin Valley - agricultural went up about 18 percent.
And Arnegard - township and agricultural both went up 21 percent.
“These are very generalized percentages,” said Svihovec. “They are not necessarily specific to any property. Other factors can make those percentages vary.”
All property in Alexander School District will see an increase in their taxes, due mainly to the Alexander School bond vote passing in October 2014. But according to Svihovec, the Alexander School District did a great job communicating this to its residents, so property owners should not be surprised.
“If the value of your property stays the same,” says Svihovec, “then your property taxes should stay relatively the same, unless any one of the political subdivisions within your taxing district raise their mill levies - and some did.”
In addition to taxable valuations going up for McKenzie County, mill levies have increased as well. In 2013, the taxable valuation for McKenzie County was $81,998,421 and for 2014, it escalated to $105,098,558.
City residents across the county will see a varying increase in property taxes because total mill levies increased for all three cities.
In 2013, the City of Alexander was at 127.15 mills and rose to 203.61 in 2014. The City of Arnegard sat at 178.80 mills in 2013 and increased to 195.99 in 2014. And Watford City was at 192.55 mills in 2013, and grew to 199.05 in 2014. These mill levies include the levies for not only the city, but also for the county, schools and fire districts within the cities.
The increase in taxes for McKenzie County property owners is best explained by the increase in valuations, levies, and the school bond levies for both McKenzie County and Alexander School districts. However, those increases are offset by the state property tax relief of 12 percent. This credit applies to all properties other than pipelines and other oil-related utility properties.
“What is nice about the new tax statement is that it really breaks it down for the taxpayer to understand where their tax money is being applied, the tax credit they are receiving, and it shows their net effective tax rate - which for most McKenzie County property owners is below one percent. That is almost unheard of in North Dakota - to be under one percent,” says Svihovec.
For questions regarding the 2014 taxes, McKenzie County residents are welcome to call the county treasurer’s office at 701-444-3616, ext. 1.