The purpose of assessment is to equitably distribute the tax burden among property owners. Assessment can be 100%, 50%, or any percent of full market value. As long as it is the same (or close to the same) percentage throughout the assessment roll, the assessment is functioning properly. Its sole function is to provide equal opportunity for similar properties to pay similar taxes based on property value.
The increase in number and value of partial property tax exemptions
shifts the proportionate tax load from one group of individuals to another. It is no longer solely based on property value. For example, if more seniors qualify for tax breaks, the remainder of the tax base must shoulder the load, as the same amount must be collected to balance the budget. Qualifying seniors then pay a smaller share.
Other groups receiving similar benefits, or tax breaks, include:
Increasing Tax Rates
- Business owners
- Tract owners
Who is left in the remainder of the tax base after exemptions? We all are, in one way or another. As seniors receive more benefits, seniors, veterans, farmers, and average home / business owners all see a greater increase in their shares than when no exemptions were available.
As exemption usage increases, tax rates will naturally increase as well, shifting the tax load among the demographic groups of people within the assessed area.