Wilder residents could see a higher city property tax rate this year after the city council advanced a proposal to collect additional revenue, a decision that will require the city to hold a public hearing and special meeting later this month.
Council voted 4-1 at its Sept. 8 meeting, during a first reading, to adopt the compensating plus 4% tax rate for both real and tangible property. Councilmember Jim Profitt was the only no vote.
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
How do property taxes work?
Because the city is considering a higher tax rate, Wilder must hold a public hearing before the rate can receive final approval. Officials said state-mandated advertising timelines prevent the city from completing that process in time for its regularly scheduled Sept. 21 meeting, prompting a special meeting Sept. 28.
The discussion centered on how much revenue Wilder needs to meet its budget and maintain city services, as well as how the city’s decision this year could affect tax calculations in future years.
City officials considered multiple options, including the compensating rate and the compensating rate plus 4%. The latter allows a taxing district to collect up to 4% more revenue from existing real property than it received the previous year, excluding revenue generated by new property.
Officials said the additional revenue is relatively small in the context of Wilder’s overall budget. Wilder City Administrator Terry Vance estimated the difference at about $14,000 in real property revenue, with additional revenue coming from tangible property.
Profitt questioned whether the city could absorb the difference rather than take the higher rate.
“So we’re talking about a $35,000 difference [between taking the compensating rate and the compensating rate plus 4%],” Profitt said. “To me, $35,000, I would think we could figure out some way to make that up.”
Others argued that the city needs to consider not only its current expenses but its ability to retain employees and keep pace with compensation offered by surrounding cities.
“It seems to me that as much as people don’t want to hear it, for the benefit of the city, I feel like we need to do the comp plus four,” Councilmember Bob Blankenship said. “We’ve got a great city staff. We want to be able to keep them. We want to be able to pay them top dollar.”
Vance also pointed to competition over employee salaries, saying city staff can see when surrounding public agencies offer higher compensation.
“We constantly are under the scrutiny of salary surveys,” Vance said. “We’re paying people this or this, and people see that; our staff see that.”
Wilder officials said changes in property values and previous tax decisions also help explain how the city arrived at this year’s proposed rate.
As property values rise, the city generally does not need to charge the same rate to bring in the same amount of property tax revenue. New development also adds taxable property to Wilder’s tax base, which can help keep the rate lower.
However, officials said the calculation also depends on how much property tax revenue the city chose to collect in previous years. When Wilder adopted rates below what it was permitted to collect, it reduced the revenue used as a starting point for future calculations.
Vance said consistently taking at least the compensating rate could help prevent larger swings in Wilder’s rates from year to year.
“Everything affects what we’re doing,” Vance said. “If you don’t take comp year over year, taking comp every year is going to continue to keep it more stable than allowing it to go up and down.”
For individual homeowners, however, the tax rate is only one part of the bill. A homeowner could pay more in city property taxes even if the city’s rate decreases if the assessed value of the home rises enough to offset the lower rate.
During the meeting, officials illustrated the difference between two potential real property rates using a $300,000 home. Moving from a rate of 21.6 cents per $100 of assessed value to 22.4 cents would amount to approximately $24 more per year for that property.
The new rate still requires a second reading and final vote at the Sept. 28 special meeting before it takes effect.
