The Racine City Council voted earlier this month to move forward a proposal to shift the cost of water services needed for fire protection from the tax levy to customer’s water bills.
In theory, this change — which the state Public Service Commission still must approve — could allow the city to decrease its tax levy. But the city is not required to make the reduction.
It’s essentially a shell game and city residents are the ones who lose — or in this case end up paying double.
Yes, the city wants to decrease its tax rate and almost undoubtedly, they will decrease the rate next year if this shift goes through.
But decreasing the property tax rate doesn’t mean people are actually saving money.
Take last year’s shell game:
The city shifted the storm water charge from the tax levy to water bills. The 2019 property tax rate decreased by 52 cents to $16.07 per $1,000 in valuation. That means owners of a $100,000 home would have seen a $52 reduction in municipal property taxes, if the property tax assessment stayed flat.
However, at the same time, residents had to pay an additional $123 in storm water fees on their water bills.
That means homeowners are paying more than they did the year before.
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And that doesn’t even take into account property value increases, which limit how much actual savings a homeowner may get on their tax bills.
From 2017 to 2018, Racine residential property assessments went up an average of 5.6 % and then this year from 2018 to 2019 assessments went up an average of 8.1 %, according to the city assessor’s office.
Now in addition to the storm water charge moving to the water bills, the city wants to add the fire protection charge often called a hydrant fee.
The proposed change would make the typical quarterly water bill about $175 by adding a $13.25 public fire protection charge to water bills. That is an additional increase of $53 per year.
The city can decrease the tax rate to make up for that increase, but like last year, the average resident could still end up losing.
State law, at one point, required that municipalities reduce the levy by the amount that was transferred to fees for new fees such as the hydrant fee. That is still true for municipalities wanting a new street sweeping or snow plowing fee, but not for the hydrant fee.
The city should keep the hydrant fee where it is as part of the property tax levy and look for other opportunities to decrease the tax rate.
Residents, especially those who are retired and on a fixed income, have tight budgets and don’t have a few extra hundred bucks to pay a higher water bill.
Residents have enough fees, such as the recycling fee that was supposed to go away years ago. Racine residents shouldn’t be further burdened financially.