Supporters say cost of moving to proposed library is modestThe increase in property taxes needed to move the Hudson Area Joint Library into the Nuclear Management Co. building isn’t as great as the wording of referendum questions on the proposal suggest, according to proponents of the plan.
By: Randy Hanson, Hudson Star-Observer
The increase in property taxes needed to move the Hudson Area Joint Library into the Nuclear Management Co. building isn’t as great as the wording of referendum questions on the proposal suggest, according to proponents of the plan.
The tax increase that would occur if voters approve the move varies from $23.23 per $100,000 of property value in the city of Hudson to $38.06 in the village of North Hudson.
For the owner of a $300,000 home in the city of Hudson, the total increase would be $69.69. The owners of a North Hudson home with the same assessed value would see their taxes rise $114.18.
The reason for the bigger increase in the village is that the amended library operating agreement approved by the four partner municipalities bases the funding on population rather than property valuation.
Under the old formula, North Hudson, with 10.9 percent of the total property value in the four municipalities, paid a smaller percentage of the library’s operating expenses.
The village has 13.5 percent of the population of the four municipalities, however, which means it will pay that share of the library’s expenses going forward.
The rationale behind the funding change was that people use libraries, not property.
The city’s share of the library expenses, meanwhile, will decline from the 46.9 percent under the old formula to 43.3 percent under the new one.
The new funding shares for the towns of Hudson and St. Joseph — 29.0 percent and 14.2 percent, respectively — are nearly unchanged from what they were under the property-value-based formula.
Taxes will increase $28.30 per $100,000 of property value in the town of Hudson and $24.81 per $100,000 in the town of St. Joseph if the library project moves forward.
Bye Barness of the Hudson Area Library Foundation and Jim O’Connor, chairman of the Hudson Area Library Board of Trustees, believe the wording of the levy override questions that will be on the ballot in the partner municipalities exaggerate the tax impact of the library proposal.
They’re afraid the questions will reduce support for the move to the NMC building.
The state law imposing a property tax levy limit on municipalities contains a specific fill-in-the-blank question that voters must be asked in seeking their approval to override the limit.
It requires municipalities to tell how much — as a percentage increase and a dollar amount — the law would allow them to increase their levies in the following year. Then they need to state what the percentage and dollar-amount increase in the levy will be if the voters approve the override.
Because there was little new construction in the village of North Hudson and the towns of Hudson and St. Joseph in 2007, the levy limit in those municipalities for 2009 is 2 percent.
North Hudson and St. Joseph would have to increase their levies a total of 7 percent to cover the costs of acquiring, renovating and operating a new library in the NMC building.
The town of Hudson, which traditionally has had a low tax levy, would have to increase its levy by 18.4 percent to cover the increased library expenses.
The dollar increase in the town of Hudson’s levy would be $148,173 — equating to a $7.08-per-month tax increase on a $300,000 house.
The city’s situation is even more confusing.
Because the city is closing its Tax Incremental District No. 4, it will be allowed a onetime 6.55 percent increase in its levy, in addition to the 2 percent increase allowed by the state.
As a result, the city’s levy override question says it could increase its levy by 8.55 percent in 2009 under state law.
The city is asking for an ongoing levy increase of $244,000 a year. The added library costs would require a 4.75 percent increase in the levy, which would bring the total increase to 13.3 percent.
The closing of the city’s tax increment financing district will increase the city’s tax base by 12 percent. So although the city expects to collect more tax revenue in 2009, it won’t be because of an increase in the tax rate.
In fact, Mayor Dean Knudson is proposing a 5 percent cut in the tax rate for next year.
Taxes won’t increase in 2009
To add to the confusion, even if voters in all four of the municipalities approve the increased library spending, the municipalities won’t begin collecting the additional taxes until 2010, at the earliest.
The Hudson Area Library Foundation will need to raise the $4 million in private funds before the municipalities will move ahead with the relocation. The deadline for raising those funds is November 2009.
Municipalities will be setting their tax rates for 2009 later this fall.
More information about the proposed library move is available online at www.lakefrontlibrary.org. The Web site is sponsored by the Hudson Area Library Foundation.