This chapter includes a hypothetical example for City A to demonstrate the alternate method of determining the extent of double taxation.
Step I - Identify Duplicated and Jointly Financed Services
Please use the table from the previous chapter (Appendix I)
Step II - Determine Total Amount of County General Fund Expenditures as reported in County Budget or Audit
County General Fund Expenditures = $5,040,224
Step III - Determine Total Amount of County General Property Taxes
County General Property Taxes = $4,000,000
Step IV - Determine Property Tax Ratio by dividing General Fund Expenditures into Property Taxes
Step V - Determine Total Expenditures for Each Duplicated and Jointly Financed Service
A. Duplicated Services
| 1 Fire Protection |
$242,631 |
|
2 Law Enforcement
|
$335,975 |
| 3 Garbage Collection |
$645,828 |
| Total |
$1,224,434 |
B. Jointly Financed Services
| 1 Recreation Center |
$112,537 |
| 2 Library |
$29,064 |
|
Total
|
$141,601 |
Note: Remember that the Standard Method requires Total General Fund Expenditures. Thus, grants and collection fees were deleted. The Alternate Method, which merely determines Total Expenditures for each Duplicated and Jointly Financed Service, includes the DOJ Grant and Garbage Collection Fees in Step IV.
Step VI - Determine Total Property Tax Expenditures for each Duplicated and Jointly Financed Service by multiplying the Property Tax Ratio times amounts in Step IV
| A.1. |
$242,631 |
x |
0.7936 |
= |
$192,551.96 |
| A.2. |
$335,975 |
x
|
0.7936 |
= |
$266,626.76 |
| A.3. |
$645,828 |
x
|
0.7936 |
= |
$512,529.10 |
| B.1. |
$112,537 |
x |
0.7936 |
= |
$89,309.36 |
| B.2. |
$29,064 |
x |
0.7936 |
= |
$23,065.19 |
| Total |
$1,366,035 |
x |
0.7936 |
= |
$1,084,085.38 |
Total Property Tax Expenditures for all Duplicated and Jointly Financed Services = $1,084,085.38
Step VII - Determine Percentage Inequity in County Taxes for County Residents Living in the City
Step VIII - Apply this Percentage to Existing County Millage Rate to Obtain Inequitable Millage Rate for County Residents Living in the City
10.9350 mills = 27.10% Reduction
Important Note: While the 27.10% inequity is certainly larger than the 24.21% inequity obtained from the Standard Method in Appendix I, it must be remembered that the 24.21% figure is much more accurate because it deals only with general fund revenues.
In some cases, county audits may be arranged so that the process of excluding non-general revenues will be extremely difficult. The Alternate Method should only be used when it is impossible to distinguish general and non-general revenues, and it allows cities to determine only an estimate of the extent of double taxation.