Property Taxes Levied vs. Taxes Collected

Property taxes levied are often cited when discussing the property taxes—this author is no exception—because they are readily available from the Dept. of Revenue and easy to work with.

However, property taxes levied do not quite tell the whole story because they do not account for the credits provided to taxpayers through the Property Tax Credit Program. Every owner of real property receives a credit from the state against taxes levied. In effect, the state pays a portion of the local property taxes which in turn reduces the amount of taxes paid. A better measure when examining property taxes is taxes collected, but taxes collected are difficult to calculate at the local government and individual taxpayer level. However, the impacts of the credit program can be examined at the state level.

The Property Tax Credit Program began with legislation passed in 2007 and $115 million appropriated to it. Funding for the program has increased since then, growing to $140 million in 2014, and almost doubling for tax year 2019 at $275 million. While property taxes levied have grown 52 percent since 2009, funding for the Property Tax Credit Program has increased 139 percent. In other words, the program is taking a bigger bite out of property taxes levied today than it did when it began. This helps reduce the actual taxes collected. In 2009, the property tax credit equaled 3.9 percent of total property taxes levied. Today, it amounts to 6.3 percent of total taxes levied, including school bonds.

Interested taxpayers can determine the impact of the Property Tax Credit Program on their taxes by examining their property tax statements. Each taxpayer’s statement details the credit amount applied to the taxes owed on the property. Perhaps it will provide some comfort knowing the amount of property taxes paid could have been worse.