EV News Article 6
This is the sixth article in a series that provides Easton Valley residents and friends with accurate information related to district operations and plans. The articles are in a question-and-answer format to respond to commonly asked questions in our community.
Q: Can a $2.70 bond vote pass without increasing my property tax rate?
A: Yes, it can! Easton Valley currently has a property tax rate of $15.08 per $1,000 of assessed property valuation. For school year 2017-2018, EV’s property tax rate will be $13.94 with a 4% income surtax. If the 2.70 bond referendum vote passes and the EV board keeps income surtax at 4% the 2018-2019 property tax rate would be approximately $15.70 per $1,000 assessed value. However, if a $2.70 bond referendum passes, and if the board chooses to implement the maximum income surtax at 9%, Easton Valley would have an approximate property tax rate of $15.00 per $1,000 of assessed value, below the current property tax rate.
Q: What is an income surtax and how does it impact residents?
A: Income surtax is a tax on state income tax paid for a calendar year. If a district has a 4% income surtax you would pay 4% of what you paid in state income taxes, in lieu of property taxes. This is not a tax increase, nor does it create more money for a school district. It is a tax that shifts some of the tax burden off of the property owners and spreads it out over all income earners throughout the district. An increase in income surtax percentage inversely affects property tax rates. For example, if a district raises its surtax percentage, property taxes fall for that funding obligation. Income Surtax is a funding stream that most area schools and a vast majority of schools across the state use to shift the tax burden from 100% property tax to a tax that catches all income earners of the district.
Q: How does income surtax affect individuals who receive Social Security benefits?
A: According to the Iowa Department of Revenue, Social Security benefits are not taxed by the state. Therefore, funding through income surtax instead of property taxes is a tax benefit to those individuals that receive the Social Security benefits.