Generate an Estimate of How the New High School Would Change Taxes for Your Address

Image generated by Adobe Firefly AI:
"Dollar Signs Flying Around A High School"

Interested in seeing an estimate of how the proposed high school project borrowing might change the taxes you pay in the future?  (Or are you just wondering what your FY2024 taxes will look like?)   This interactive spreadsheet will show you the actual tax history of your property since FY2010, plus a couple interesting estimates about the future.

LINK TO THE SPREADSHEET:  THE CALCULATIONS ARE EXPLAINED BELOW.  YOU'LL PICK AN ADDRESS FROM THE DROPDOWN AT THE TOP.

The school district has shared some estimates of how the debt assessment would increase our taxes in town -- I wanted to kind of sanity check them.   I have some data available from old projects, so I think I should be able to estimate the tax impact for the various parcels in town.  

Plan of attack:
1. Start with the FY2023 (the fiscal year that ended on June 30) tax info.  That's the last year we have actual data for right now: we know what the valuations were, what the tax levy was, and what the rate was.

2. Work out what our current year taxes are.    We approved a budget in June, but we don't know our property valuations or what tax rate will be approved.   (We're all just paying "estimated" assessments right now; typically Lancaster's tax rate isn't approved until December.)  We'll just use the FY2023 valuations and work out the tax rate required to levy the amount we approved at Annual Town Meeting in May.

3.  Add the school districts estimated annual school debt assessment to our FY2024 budget, and then calculate the tax rate that would have been required to levy that amount.   We won't pay the assessment this year, but this will estimate the impact you'd see in the future.

That should be a fair approach.   This should give us:

• What we really paid in FY2023.
  
• A fair estimate of what we'll pay this year (FY2024).
• A fair estimate of what you'd have paid in FY2024, were we paying the estimated debt assessement
  

So here we go!

1. Start by assembling the actual FY2023 tax info:

First we'll just use the actual FY2023 data to re-create the FY2023 tax rate.  As shown below, the town wanted to levy $22,061,021 from it's $1.2 billion in property, and that led to a tax rate of $17.19 per $1000.

So, last year the "average home" (reported as $456,209) paid $7842.23 in taxes.

2. Work out our current year taxes

Right now we're all paying "Preliminary Taxes" -- it's just an estimate calculated as your assessment from the previous year increased by 2.5%.  This fall our valuations will be adjusted and late in the year a new tax rate will be approved, and our bills in January and April will make up the difference.   The budget we approved in May increased our taxes quite a bit, but it's not reflected in our tax bills yet.

According to the budget we approved in May, the tax levy increase from FY2023 to FY2024 will be 1,673,122.00.   The table below shows what the tax rate would be if you levied that new amount from the FY2023 valuations:  $18.49 per $1000. 

(Note that in reality, I assume we'll get higher property valuations this fall.  As a result the tax rate should be lower, but against a higher value,.)

 

So this year our "average home" should pay $8436.99, a $594.76 increase.   That' a 7.6% increase year over year.

3.  Work out what our taxes would have been this year with the school debt assessment

We're won't pay the school debt assessment this year, but we can work out what our taxes would be if we did.  I think that's a good way to weight the impact.

The school district estimated that Lancaster's annual assessment for the school building debt will be $3,423,900 per year.   I haven't seen any reason to think that's not a good estimate.   It's a lot of money any way you slice it: by way of comparison Lancaster's FY2024 budget for non-school expenses and salary is $6,570,599.00: the annual debt assessment would be 52% of what it cost to run Lancaster this year.

The table below calculates the tax rate that would be required to raise our levy:  it uses the FY2023 valuations again.   It levies $27,158,043.00:  that's the actual $22,061,021 levy from FY2023, plus the $1,673,122.00 increase we approved in July, plus the $3,423,900 estimated annual school debt assessment.

The required tax rate is now $21.16 per $1000.

At that tax rate the "average home" would pay $9654.12 annually.  That's a $1217.13 (14.4%) increase over what we estimated for this year. 

Summary:

The debt assessments to pay for the new high school would definitely present very steep increases for the average homeowner, who can already expect a steep tax increase this year.

For the average Lancaster home ($456,209 value in FY2023) we estimated taxes as follows:

FY2023 Actual:                                 $7,842.23
FY2024 as budgeted:                         $8,436.99   (+$594.76, a 7.6% increase)
FY2024 as budgeted, plus school:     $9,654.12   (+1,217.13, a 14.4% increase)

We won't actually pay the debt assessment in FY2024 (as far as I know) but that last figure should be a good estimate of the impact in future years.  

We're clearly not far from the first year that the "average" home in Lancaster will pay $10,000 per year.