An extra zero mistakenly added to the value of a tax incremental financing district means about a $135 hike in city property taxes for the average Verona homeowner next year.
The good news is that residents could eventually get that money back.
Verona assessor Paul Musser said he “hit an extra zero” when punching in the value for one of the city’s TIF districts on an online form submitted to the state Department of Revenue. The Verona Press first reported the mistake on Tuesday.
TIF is a financing tool that allows municipalities to freeze property values in specific geographic areas, borrow money to make improvements in those areas and then reap the full tax value of the areas once improvements are complete. The increased tax collections are used to pay back loans and boost the city’s tax revenues long-term.
Musser’s mistake brought the reported value of the TIF from about $5.4 million to about $54 million, bringing down what Musser referred to as the “TIF out” value of city property — or the value of all taxable city property less what’s in the city’s TIF districts.
A smaller tax base with no corresponding major decrease to the city’s budget means each property owner is left having to pay more. Or as Musser put it, a bigger “TIF out” value “increases the rate because you have less value to tax.”
Musser’s mistake was caught as the city was preparing its 2019 budget this fall, but by then it was too late to correct it, according to DOR spokeswoman Patty Mayers. The department publishes preliminary equalized values for municipalities on Aug. 1, and gives municipal officials until Aug. 15 to finalize them. Changes made after that date can affect the values of other municipalities, she said.
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However, “it can be corrected for the future,” Mayers said.
Musser explained, and Mayers confirmed, that the city can take steps so that the average homeowner would see city property taxes go down by about $270 in the bills due in 2020, then back up to even in the bills due in 2021.
Musser — who said he’s been in the assessment business for 36 years and never made a mistake like the one he made in June — wasn’t sure whether the city would keep him on for the rest of his four-year contract, which runs through 2022.
“It just takes one mistake like this,” he said. “I just feel terrible about it.”
He said other local officials missed chances to catch the mistake as well.
From 2014 through 2017, the mill rate in Verona — or property tax rate per $1,000 of value — has either gone down or remained the same.