Monday, February 4, 2013

Where does that tax money go?

On one particularly normal November afternoon I checked our mailbox when I got home and pulled out a particularly normal pile of catalogs, credit card offers, and assorted junk mail. I tossed it on the table as I went through the door, and a slender white envelope slid out. I stared at it in horror. Picking it up, I took a deep breath and tore it open to see our Laurens County Property Tax bill.

Just like you, I dislike paying taxes. Right at the end of the year we have to write a big check to cover our taxes. Nobody likes paying taxes. I think one of the reasons we hate paying taxes and utility bills is because unlike going to the store, after we pay those taxes we have no tangible product that we can hold in our hand. If you go to any one of our local business and hand over some of your hard earned money, you will leave with something you bought in your hands. When you pay tax bills it is more difficult to equate what you pay with what you are buying.

This month, now that you’ve already paid your property taxes, let’s take a long hard look at a City of Clinton tax bill and let’s see where all that money goes. First, we have to have a piece of property and in this case let’s take a house that has an appraised value of $100,000 and for the sake of argument let’s say the land the house sits on is valued at $20,000. The house is in Laurens County, but it is also inside the City Limits of the City of Clinton.

The total amount that the above homeowner, and taxpayer, would pay, after school and sales tax credits are applied, would be $740.18. This money is allocated to Laurens County, schools, other organizations, and to the City.

Here’s how your tax dollars are divided. First, 64.5% of your tax bill goes to support education in our community. In our example, Laurens County School District 56 would receive $475.79 and the higher education center would receive $1.97. Laurens County receives 29.7%, or in this case $220.17 of your taxes for county operations, EMS, creation of a reserve fund, and capital improvements and a $60 fee for the county landfill. Indigent Care is also funded from your taxes, and in this case that would make up $1.97 from your tax bill.

Finally, the City of Clinton receives slightly over 5% of your property taxes. In this case, the 5% equates to just $40.27. The largest part of your city taxes, 45 % (or in our example $18.19) funds the provision of police and fire services to city residents. Think about that for a minute. For just $1.52 per month, probably the amount of spare change hiding under your couch cushions,  the City of Clinton provides you with police and fire services every day of the year.  

Our inspections and code enforcement operations receive 4%, or $1.78. Both economic development and municipal court receive tax funding at a rate of 2% of your city taxes, or less than $1 each per year. Five percent of your city taxes go towards streets, which in our example equates to a little more than two dollars per year. Seven percent is used to support the sanitation operation. The monthly charge paid for sanitation does not cover the entire cost of providing the sanitation service. Parks and recreation gets 6%, or $2.41 per year. Finally, the remaining 27%, or slightly more than $10, is used to make payments on debt, and cover costs associated with legal services, finance, and other general services.

Understanding your tax bill is complicated because so many services and organizations are receiving part of the funds. It is important to keep in mind that the schools, county, and city all share to some extent the revenue created by property taxes. It also very important to keep in perspective that your city receives only 5% of the total tax bill, and that the 5% is used to provide critical services to make our city a great place to live, work, and to raise a family.